Carphone Warehouse today sounded a cautious note on growth in mobile connections and broadband subscriptions for the year ahead in the face of the poor economic climate.
CEO Charles Dunstone said that net broadband connections to date in the financial year were lower than expected, caused by a slowdown in the housing market and increased dongle sales.
The warnings caused Carphone’s share price to drop as low as 185p at one stage this morning, its lowest level since 2005.
The cautious outlook for the year ahead came as Carphone revealed year end results showing a 75% increase in pre-tax to £216m.
Carphone’s sales were up 12% to £4.4bn, after mobile connections rose 15% last year to 11.5m.
But Dunstone said the group was targeting mobile connections growth of 8-10% in the coming year, despite connections being up 12% in the first 12 weeks of the year.
He said: ‘This has been a very successful year for The Carphone Warehouse.
‘Financially we have performed very well, with 12% growth in revenues and 75% growth in headline pre-tax profit.’
He added: ‘We remain cautious in our outlook for the year ahead, given the poor economic climate and inflationary pressures on European consumers.
‘Our new venture with Best Buy will enable us to adapt our business to our customers' changing needs better and more quickly than we could on our own, as well as giving us a whole new avenue of potential growth in the wider consumer electronics market place.
‘We began the roll out of our in-store laptop offer last week, and very early indications are positive. We expect a strong customer response to the iPhone 3G, which launches next month.’