Carphone Warehouse delivers like-for-likes up 5% in the UK

The group delivered soaring profit before tax up 30% to £8.6m. Carphone Warehouse Europe reported EBIT of £12.5m, as strong postpay momentum drove like-for-likes in this division up 1.6%.

It remains on track to deliver full year EBIT guidance of £130m-£150m.

The group said the UK delivered “substantial” market share gains for postpay volumes through promoting weekly Smart Deals and new product launches.

The prepay market remains down, dragging down total connections for the group, which fell overall by 11.5% in the half. The retailer said it expects prepay to improve in the second half of the year as the new product pipeline continues to innovate and it expects more smartphones to be sold through prepay this Christmas as prices become more attractive.

Carphone Warehouse has also been building up its portfolio of Wireless World stores and will have 280 stores in the UK by Christmas and will roll out elements of the stores to the rest of Carphone’s 500 UK store estate.

Carphone Warehouse chief executive Roger Taylor said: “We have delivered a good performance in a dynamic mobile market, with sales benefitting from our renewed focus and specific investment initiatives. 

“Looking ahead, we reiterate our full year guidance, we continue to focus on operational execution across the business and we remain well-placed to benefit from a strong product cycle.”

Carphone Warehouse added that it has been running “a number” of trial stores in Europe with potential partners which could help business growth.

The retailer added: “We are pleased with the performance of these stores so far. We will continue to explore these opportunities to gain scale in a number of our mainland European markets.”

The reorganisation of Carphone Warehouse Europe to create a standalone UK and Ireland business and standalone European markets has continued and is expected to bring “significant” benefits with annualised pretax savings of between £20m and £25m.

Exceptional charges are expected in the second half of the year, however, with provisional estimates of one-off pre-tax cash costs of between £20m and £25m, together with asset write-downs of between £5m and £10m.