Carphone Warehouse's profit hike reflected the £813m raised from selling its interest in US group, Best Buy Mobile. Adjust for that, and £88.5m of exceptionals from the closure of 11 struggling UK Best Buy stores, and pre-tax profit rose 3.6 per cent year-on-year £58.3m. That modest progress reflected such headwinds as mobile phone-related regulatory actions and challenging consumer conditions - leaving few obvious share price drivers.
Revenues from CPW Europe fell 5.5 per cent as the business faced weak consumer conditions and regulatory action meant operators cut pre-pay handsets subsidies, forcing a 30-40 per cent slide in pre-pay volume connections in some of the unit's markets. Overall a net 36 stores were closed at CPW Europe leaving a 2,393-strong estate. So it was mainly down to cost savings to protect margins and maintain operating profits at £135m.
But Virgin Mobile France, in which Carphone has a 47.1 per cent stake, performed better. While the customer base remained flat, the better quality postpay segment rose by 7.6 per cent - so revenues grew 18.8 per cent and operating profits rose 4.5 per cent to £21.5m.
Citi expects current year adjusted pre-tax profit of £58.1m and EPS of 11.7p (2012: 12.6p).
CARPHONE WAREHOUSE (CPW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 131.8p | MARKET VALUE: | £ 623m | |
| TOUCH: | 131.8-132p | 12-MONTH HIGH: | 215p | LOW: 120p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 1 | |
| NET ASSET VALUE: | 150p | NET CASH: | £102m | |
| Year to 31 Mar | Turnover (£m)† | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 5.50 | 218 | 48.7 | nil |
| 2011 | 5.60 | 67 | 14.5 | 5.00 |
| 2012 | 6.40 | 762 | 167.0 | 5.00 |
| % change | +14 | +1034 | +1052 | - |
Ex-div:04 Jul Payment:03 Aug †From wholly-owned operations only | ||||
