Strong contract growth and a boost to its dealer channel has led Carphone Warehouse Europe to post an increase in profit after tax of 5.8%.
It singled out the UK market as a key performer, with like for like sales up 10% during the year, despite the slumping prepay market. The retailer, which has completed the takeover of Best Buy's 50% share of CPW Europe, saw its sales increase by 11.5% to £3.69bn for the full year to 31 March. It said it had 'significant' market share gains across all categories, with a strong performance in the second half of the year. On a like for like basis, sales were up 4.6%. It said low value contract deals were driving volume sales in the UK.
The retailer said: 'Our Smart Deal promotions and compelling propositions on key handsets, coupled with our investment in our store environment and online platforms, have increased our share in both the postpay and prepay segments.'
During the past year, Carphone Warehouse reorganised its business, a move which led to the departure of UK MD Matt Stringer and involved closing stores in France and cutting costs. The retailer said this restructure cost it a pre-exceptional charge of £25.1m but the move will save it between £20m and £25m each year.
Looking ahead, CPW said 4G might provide a boost to the handset replacement cycle and the chance to develop deals that reflect 'higher quality services and higher levels of data consumption'. It said it expected further sales growth in contract deals and tablets, whether standalone or bundled with smartphones.
The retailer also announced several changes at senior level this morning. Roger Taylor, CEO of Carphone Warehouse Group, said: 'Carphone Warehouse has had another good year, during which we made key strategic moves and delivered on our guidance. In the UK, we have grown our market share in both the postpay and prepay segments through 'Smart Deals' and excellent customer service, continuing to build our trusted brand. The acquisition of Best Buy's 50% share of CPW Europe is now complete and we are excited to regain full control of the business, with the clarity and focus of management that the business deserves.'
Author: Graeme Neill