3rd Quarter Trading Statement

Carphone Warehouse Group PLC
23 January 2002


Wednesday 23 January 2002

Embargoed until 0700 hours



                        The Carphone Warehouse Group PLC

                        Third Quarter Trading Statement

                        13 Weeks Ended 29 December 2001

Retail / Online

Strong UK retail performance; substantial growth in Group market share and
subscription connections in a market that is over 40% down; weaker performance
in three European countries

  • UK


    Connections of 661,000 against 687,000 last year

    Like for like gross margin of +2% and like for like revenues of -5%

    Market share increased to over 20%

  • Europe


    Connections of 484,000 against 529,000 last year

    Connections excluding Germany, The Netherlands and Belgium up 3% on last
    year

    Like for like gross margin of -16% and like for like revenues of -16%

  • Group


    Connections of 1,145,000 compared to 1,216,000 last year

    Like for like gross margin of -6% and like for like revenues of -9%

    Mix of high value subscription connections increased from 37.5% to 43.2%

    Average revenue and gross margin per connection maintained in line with
    expectations

    Store portfolio increased from 1,020 (ex-Tandy) last year to 1,138

Recurring Revenue: telecoms services and insurance

Substantial growth in telecoms services base as at 29 December 2001 to over one
million customers; recurring revenue streams increased by 93% in the period
compared to last year.

  • Our own customer base increased to 160,000 from 55,000 last year
  • Facilities management base increased to 850,000 from 105,000 last year
  • Insurance base increased to 929,000 from 752,000 last year

Christmas Trading (4 weeks to 29 December 2001)

  • UK connections of 303,000 compared to 318,000 last year
  • European connections of 228,000 compared to 251,000 last year
  • Group connections of 531,000 compared to 569,000 last year with
    subscription mix of 33.6%
  • Like for like gross margin of -9% and like for like revenues of -12%



Charles Dunstone, Chairman and Chief Executive said:

'The company has delivered a strong performance in a European handset market
which is estimated to be down by over 40%. The Group has continued to win market
share across Europe with an increase of over 40% in nearly all markets. In the
UK we have made particularly strong gains, where our share of the mobile handset
market is now in excess of 20%.

'Like for like revenues declined against very tough comparatives, though by
significantly less than the market as a whole. Against this backdrop our UK
operating business achieved a 2% increase in like-for-like gross margin and a
21% growth in subscription connections, a particularly strong performance. We
continue to be disappointed by our performance in Germany, and The Netherlands
and Belgium were also weaker than we had anticipated. Management focus has
increased accordingly.

'During the period we have continued to enjoy substantial growth in our
recurring revenue streams. These revenues generated from services and billing,
insurance and our share of continuing customer spend have almost doubled in the
period. The combination of our customers under management and subscribers to our
virtual operator 'Fresh' now exceed one million for the first time. Our strategy
of developing revenue streams that participate in the lifetime value of
subscribers is proving particularly successful and is significantly improving
the quality of our earnings as we move forward. We continue to see this as an
important area of growth for the future.

'Our wholesale business continues to under perform and revenues are down in this
period against last year. We do not expect any significant improvement in this
area for the next twelve months at least, although the impact on our overall
Group gross margin is limited in comparison to the headline sales impact.

Christmas Trading

'During the Christmas period we bought well, had good stock availability and
were particularly successful in gaining market share through innovative products
and offerings. We also enjoyed the benefits of the flexible 'Fresh' customer
proposition.

'The success of our innovative prepay offerings generated incremental profits
but did prove to have an adverse effect on our prepay/subscription mix profile.
This trend continued into early January.

Current Trading

'In the period from 30 December to 19 January we have continued to see a very
strong performance in our core UK retail market and a number of leading European
markets but weak performance in Germany, The Netherlands and Belgium.

Future Prospects

'The overall market for mobile handset sales will continue to be tough for the
next six months. We intend however to continue to grow our market share, our
subscription connection numbers and our quality of earnings. In addition we
foresee an ongoing contraction in the total number of distribution points for
mobile phones across Europe.

'From this Autumn onwards we believe that a combination of new handset
functionality and innovative technology will once again stimulate the market.
The strength of our retail proposition, improving sales mix and commitment to
customer service will continue to drive forward our business and increase our
market share.

'The current financial year will be impacted by the shortfall of connection
numbers in weaker European markets, the higher proportion of prepay sales than
previously anticipated and the level of wholesale activity. This considered, we
anticipate that our current full year EBITDA will be below market expectations
by up to 10%.'

Preliminary Results

The Carphone Warehouse Group PLC will be issuing its 31 March 2002 preliminary
results on 5 June 2002.

Enquiries

The Carphone Warehouse Group PLC               07771 868 601

Charles Dunstone

David Ross

Roger Taylor

Tristia Clarke

Citigate Dewe Rogerson                         020 7638 9571

Anthony Carlisle (07973 611 888)

www.carphonewarehouse.com







Key Financial Statistics (note: all 2000 comparatives are ex-Tandy)

  • Connections, mix and store number comparatives for 13 weeks to 29 December
    2001



                     13 weeks to December                 Year to date

                      2001           2000              2001            2000

Connections

UK                 661,000        687,000         1,494,000          1,446,000

Europe             484,000        529,000         1,188,000          1,115,000

Group            1,145,000      1,216,000         2,682,000          2,561,000

Subscription Mix

Group                 43.2%          37.5%             50.0%              43.3%

Store Numbers

UK                     466            402

Europe                 672            618

Group                1,138          1,020

  • Additional European Connections data for 13 weeks to 29 December 2001

Germany             44,000         68,000           106,000             91,000

The Netherlands     35,000         57,000           113,000            132,000

Belgium             17,000         26,000            53,000             55,000

Rest of Europe     388,000        378,000           916,000            837,000

Total              484,000        529,000         1,188,000          1,115,000



  • Sales data for 13 weeks to 29 December 2001

                      2001           2000              2001               2000

                      £000           £000              £000               £000
  Distribution

Retail             181,919        183,815           460,944            424,029

Online               9,974         10,639            25,539             23,648

Insurance           16,031         12,353            42,415             32,896

Wholesale           79,825        119,765           255,264            246,671

                   287,750        326,572           784,161            727,244

Telecoms 
Services            23,684          8,245            66,863             20,202

Total              311,434        334,817           851,024            747,447

  • Quarter 3 2001 like for like information

2001 LFL Information              Revenue            Gross Margin

UK                                95%                102%

Europe                            84%                84%

Group                             91%                94%

  • Connections, Mix and LFL data for the 4 weeks to 29 December     2001

                         2001               2000

Connections

UK                    303,000            318,000

Europe                228,000            251,000

Group                 531,000            569,000

Subscription Mix

Group                    33.6%              31.3%

2001 LFL Information   Revenue      Gross Margin

Group                      88%                91%

  • Connections and Mix for 3 Weeks to 19 January 2002

                         2002               2001

Connections

UK                    141,000            147,000

Europe                 90,000            124,000

Group                 231,000            271,000

Subscription Mix

Group                    44.9%             40.5%

Note: In our European markets where the Euro was introduced the post Christmas
sales period was delayed thus making the above European connection numbers
incomparable with the previous year.



                      This information is provided by RNS
            The company news service from the London Stock Exchange