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CPW sees UK LFLs jump 16%

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Electricals and mobile phone retailer Carphone Warehouse (CPW) saw UK like-for-like (LFL) sales jump 16 per cent in its third quarter, driven by the popularity of tablets, according to figures released today.

Postpay offers also drove growth, the retailer said, with Christmas promotions and discounts boosting sales while the prepay market “remained weak”, falling 15 per cent for the quarter ended December 31st 2012.

In Europe, LFL sales increased 7.8 per cent though CPW CEO Roger Taylor noted that the strong performance in the UK buoyed “broadly flat” LFLs in mainland Europe.

He commented: “I am delighted with the performance of our UK business over the Christmas quarter, with like-for-like revenues up 16 per cent, building on the momentum seen in Q2, and this has helped drive a strong overall 7.8 per cent like-for-like revenue growth.

“We substantially grew market share in both prepay and postpay, and gained authority in tablets.

“This reflects extremely well on our team and on our policy of investing in our proposition to give our customers compelling offers on smartphones and tablets, accepting some margin investment.

“Mainland Europe like-for-like revenue was broadly flat, with trading being particularly challenging in France, and this, combined with the margin investment in the UK, means that we will not be changing our full year earnings guidance.”

However, trading in France “remained particularly tough” and this is expected to continue “for the foreseeable future.”

Nonetheless, the group’s Virgin Mobile France venture saw year-on-year sales growth of 9.9 per cent to £120 million over the period, highlighting consumer demand for tablets and smartphones despite continued financial strain.

CPW said in a statement: “The overall economic and mobile industry backdrop has not altered, but we remain well-placed to benefit from an exciting range of smartphones and tablets.

“The reorganisation of our business has enabled improved focus and operational execution, helping to achieve market share gains with strong like-for-like and top-line performance.

“We are still sub-scale in parts of Continental Europe and as such these markets will remain comparatively challenging.

“Whilst the UK has enjoyed good like-for-like growth, these improvements have largely been driven through investment in the proposition.

“Therefore, we are reiterating our guidance for Group Headline EPS.”

Published on Thursday 24 January by Editorial Assistant

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