AGM and Q1 Results

Carphone Warehouse Group PLC 28 July 2005 Thursday 28 July 2005 Embargoed until 0700 hours The Carphone Warehouse Group PLC First Quarter Trading Update Group revenues up 23.3% The Carphone Warehouse, which is holding its AGM today at 11.00 am, announces its first quarter trading update. Figures relate to the 13 weeks to 2 July 2005. Distribution • Retail revenues up 17.0% to £259.2m, 3.1% like-for-like • Retail gross profit up 17.0%, 3.0% like-for-like • Total connections up 19.0% to 1.45m • Subscription connections up 20.4% to 0.72m • 75 new stores opened, taking the portfolio to 1,536 • Insurance base up 24.0% to 1.70m Telecoms Services • Opal revenues up 3.4% to £59.9m; up 17.3% ex premium rate • 990,000 TalkTalk UK customers; line rental to launch in August • Mobile customer base up 20.7% to 2.42m • Strong performance from MVNO operations Charles Dunstone, Chief Executive Officer, said: 'Progress so far this year has been ahead of our expectations. The mobile market environment continues to benefit our model and growth in subscription connections has picked up from the fourth quarter. We have recently hit the one million customer landmark for TalkTalk in the UK and will be launching our line rental service in August. Furthermore, our MVNO strategy is beginning to gain momentum as we identify niche services in a fragmented market.' Distribution Total connections grew by 19.0% to 1.45m in the first 13 weeks of the year, driven by strong demand in all categories. Subscription connections grew by 20.4% to 0.72m and pre-pay connections (including SIM-free) grew by 17.7% to 0.73m. Growth in our Online business was particularly strong, driven in particular by our continued expansion into the 'off-the-page' market. Within Retail, revenues grew by 17.0% to £259.2m. Like-for-like revenue growth was 3.1% and like-for-like gross profit growth was 3.0%. Average gross profit per connection rose as a result of a strong new subscription mix and a recovery in pre-pay profitability. We opened 75 net new stores in the period, taking the total to 1,536, compared to 1,279 at June 2004. Our Insurance customer base grew by 24.0% year-on-year to 1.70m and Insurance revenues grew 17.2% to £27.7m. Ongoing revenues grew 14.6% to £13.1m against a very strong quarter last year, supported by continued good subscription growth across the group over the last twelve months. Telecoms Services Total fixed line revenues increased by 32.8% to £125.0m. Opal revenues grew 3.4% to £59.9m, with growth in non premium rate revenues of 17.3%. Revenue per minute continued to be depressed by the impact of the mobile termination rate cuts in September 2004, and also by the continuing competitive environment in parts of Opal's market. Business traffic switched through the Opal network grew by 38.7% to 1.69bn minutes. Total TalkTalk UK revenues were £42.9m, up 86.8% year-on-year. TalkTalk UK had 990,000 tolling customers at the end of the quarter, up from 511,000 at the end of June 2004. The base has passed the one million customer milestone during July. During the period we adopted a more selective approach to customer acquisition, with a focus on the higher quality channels. Monthly contribution per customer continued to be in line with expectations. In August we will be launching our own line rental service, thus allowing our customers to receive a single bill from TalkTalk. We have started to trial our own internal field sales force and have recently signed up as a partner to the Nectar loyalty scheme. We expect all of these initiatives to reduce recruitment and retention costs, while allowing us to continue to pursue an aggressive customer growth strategy. Our broadband base grew to 62,000 as we develop and refine the customer proposition. Broadband is strategically important to both TalkTalk and Opal, and as the likely longer term regulatory environment becomes clearer as the year progresses, we will evolve our strategy towards more rapid customer recruitment and the most effective means of broadband service delivery. Non-UK TalkTalk revenues, including N Tel, were £15.0m. The base grew to 200,000 from 170,000 at the year end, and we have now launched TalkTalk in Belgium and Ireland. Mobile revenues increased by 16.7% to £104.7m. The Phone House Telecom revenues were up 18.2% year-on-year to £82.6m, reflecting sustained growth in customer numbers over that period. The customer base grew by 30.5% to 925,000, with the subscription base growing by 23.7% to 689,000. We have recently reached a number of new third party distribution agreements that will allow us to continue to drive further strong base growth. Other mobile revenues rose by 11.3% to £22.1m. Our FM base in the UK and France grew by 9.5% to 1.31m. Meanwhile our MVNO base rose by 61.1% to 189,000 as Fresh benefited from our aggressive tariffs, and our two new propositions, Breizh Mobile and Mobile World, both began to gain traction. We have been very encouraged by the performance of our MVNO businesses this year and believe that we will be able to pursue further opportunities in the medium term. Board changes As previously announced, David Goldie, Chief Operating Officer, Telecoms, will today be appointed to the Board as an Executive Director. In addition, we are pleased to announce the appointment of David Mansfield, Chief Executive of GCap Media plc, as a new Non-Executive Director, effective from 29 September 2005. David Ross, Deputy Chairman, has decided to move to a Non-Executive role to reflect his increasing external business commitments. The Board is actively engaged in attracting additional Non-Executive Directors and expects to make further announcements in due course. Conference call There will be a conference call for investors and analysts at 9.00 am this morning. The dial-in numbers are 0845 301 4094 in the UK and +44 20 7081 9482 for international callers. A replay will be available for seven days, for which the dial-in number is +44 20 7081 9440. The account number is 897311 and the recording number is 496646. The conference call will also be webcast at www.cpwplc.com. Next trading update The group will issue a first half trading update, covering connections and customer numbers, on 12 October 2005, and publish its interim results on 3 November 2005. For Further Information For analyst and institutional enquiries Roger Taylor 07715 170 090 Peregrine Riviere 07909 907193 For media enquiries Vanessa Tipple 07947 000 021 Anthony Carlisle (Citigate Dewe Rogerson) 07973 611 888 020 7638 9571 Operating and Financial Statistics • Revenues (£000s) 13 weeks to 2 July 2005 2005 2004 % change Distribution Retail 259,190 221,534 17.0% Online 44,745 21,564 107.5% Insurance 27,661 23,593 17.2% Ongoing 13,055 11,396 14.6% Total 344,651 278,087 23.9% Telecoms Services Mobile 104,671 89,721 16.7% Fixed Line 125,042 94,127 32.8% Total 229,713 183,848 24.9% Wholesale 34,201 31,186 9.7% Eliminations (4,904) (3,557) 37.9% Group Total 603,661 489,564 23.3% • Like for like data 13 weeks to 2 July 2005 Revenue Gross Profit Group 3.1% 3.0% • Connections, mix and store numbers 13 weeks to 2 July 2005 2005 2004 % change Connections Subscription 724,216 601,597 20.4% Pre-pay 620,585 517,915 19.8% SIM-free 107,477 100,800 6.6% Group 1,452,278 1,220,312 19.0% Own stores 1,449 1,246 16.3% Franchises 87 33 163.6% Total stores 1,536 1,279 20.1% • Customer bases As at 2 July 2005 (000s) 2005 2004 % change Insurance 1,703 1,374 24.0% Telecoms Services - Mobile 2,421 2,005 20.7% TalkTalk UK 990 511 93.7% Broadband UK 62 - - TalkTalk non-UK 200 - - • Switched minutes 13 weeks to 2 July 2005 (m) 2005 2004 % change Opal 1,692 1,220 38.7% TalkTalk 1,358 707 92.0% Total 3,050 1,927 58.2% This information is provided by RNS The company news service from the London Stock Exchange

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