Interim Management Statement

Carphone Warehouse Group PLC
18 January 2008



Friday 18 January 2008


For immediate release


                        The Carphone Warehouse Group PLC

                          Interim Management Statement

                         Third Quarter Revenues up 14%

                      Outlook for the full year unchanged


The Carphone Warehouse announces its third quarter trading update for the
thirteen weeks to 29 December 2007.


Distribution

  • 13% growth in Retail revenue to £650m, 1.0% like-for-like
  • 3.1% growth in like-for-like Retail gross profit
  • December like-for-like revenue up 3.6%, gross profit up 8.0%
  • 11% growth in connections to 3.6m
  • 11% growth in subscription connections to 1.3m; up 16% excluding
    off-the-page
  • 17% growth in all telecoms subscriptions; up 22% excluding off-the-page
  • 86 net new stores opened, taking the total to 2,423


UK Fixed Line

  • 36% growth in revenue to £349m
  • 118,000 broadband net adds, taking total base to 2.6m
  • 221,000 customers unbundled, taking unbundled base to 1.6m or 61% of the
    total
  • 1,533 TalkTalk exchanges and 924 AOL exchanges now unbundled



Charles Dunstone, Chief Executive Officer, said:


'We have enjoyed a good third quarter across the Group.  In the Distribution
business, we significantly outperformed the market in both subscription and
pre-pay, reflecting the enduring strength of our customer proposition and good
execution.  Within UK Fixed Line, we continued to make excellent progress in
customer growth, network roll-out and profitability, with recruitment trends
strengthening into 2008.  Overall our expectations for the full year are
unchanged.


'We believe we are well positioned as a Group, despite the more uncertain
consumer environment.  This year a significant proportion of profits will come
from recurring revenue streams.  In our Distribution business, the mobile
industry business model and ancillary revenue streams provide strong earnings
support.  In our broadband business, our value proposition and the success of
unbundling significantly enhance the visibility of future earnings.'



Distribution

Total Distribution revenues were up 9% to £900m (2006: £827m).


Retail revenues were up 13% to £650m.  Like-for-like revenue growth was 1.0% for
the 13 weeks, and like-for-like gross profit growth was 3.1%.  In the four week
period of December, like-for-like revenue was up 3.6% and like-for-like gross
profit was up 8.0%.  We opened 86 net new stores in the quarter, taking the
total portfolio to 2,423.  Total connections were up 11% to 3.6m.  Subscription
connections were up 11% to 1.3m, and pre-pay connections (including SIM-free
sales) were up 11% to 2.3m.  The off-the-page channel continued to lag, as
expected, and subscription connections excluding this channel rose 16%
year-on-year.


Although the pre-pay market was a little more subdued than last year, we
significantly outperformed the market and grew our share, thanks to our
differentiated product range and our clear value proposition.  In particular, we
saw further encouraging developments in our plans to provide a broader
connectivity proposition, with strong growth in mobile data and fixed line
broadband sales:  total connections growth was 17% across all telecoms
subscriptions, or 22% excluding off-the-page business.


Insurance revenues rose 22% to £43m, driven by continued good growth in the
customer base.  Ongoing revenues were up 34% to £24m, continuing the positive
trend of previous periods.


Total Mobile revenues were up 1% to £133m.  Within this, The Phone House
Telecom, our German service provision business, grew revenues by 10%, reflecting
a more stable ARPU trend in the subscription customer base and further customer
growth.



UK Fixed Line

Total UK Fixed Line revenues were up 36% to £349m.  Residential revenues rose
57% to £273m.  Our broadband business continued to demonstrate very good
momentum, with 118,000 net adds in the quarter, taking the total broadband base
to over 2.6m.  We now expect total net adds in the second half to be towards the
upper end of the 200-250,000 range indicated in October 2007.  Despite
significant numbers of TalkTalk customers coming out of their initial 18 month
contract period, we saw no increase in churn levels.  Blended broadband ARPU was
stable at £22.1.


During the period a further 221,000 customers were connected to our own
unbundled network, taking the total on-net base to 1.6m, or 61% of all broadband
subscribers.  We continued our exchange roll-out in line with our plans, and
ended the period with 1,533 fully-unbundled TalkTalk exchanges and 924
partially-unbundled AOL exchanges.


The base of other billed residential customers was 1.9m at the end of the
period, reflecting continued migration from narrowband and voice-only services
to bundled broadband services.


B2B revenues fell 9% to £77m.  Excluding low margin premium rate services,
revenues were flat year-on-year.  The underlying quality of business continued
to improve, translating into improving margins.


Associates and joint ventures

Virgin Mobile, our joint venture MVNO in France, made further good progress over
the period, establishing itself clearly as the fourth largest network in the
French market.  At the end of 2007 Virgin Mobile had 800,000 customers and has
set a target of 2 million by the end of 2010.


In the US, Best Buy Mobile, our mobile retail venture with Best Buy, is
progressing well.  By the end of the period we were present in 181 Best Buy
stores with the new concept, with 8 standalone stores also in operation.  We are
well on target to cover the entire US portfolio by the end of 2009.  Our Geek
Squad home technology support service continues its measured roll-out in the UK,
and is launching in Spain this month.


Financial position

As required by the Interim Management Statement provisions, we confirm that
there has been no significant change in the financial position of the Group
since the interim results in November 2007, save for the information contained
in this Interim Management Statement.


Outlook

Our outlook for the Group remains positive.  In the Distribution business, we
expect to continue to gain share through ongoing expansion and our clear
customer focus.  The development of our broader connectivity proposition will
gain pace during 2008.  On the Fixed Line side, we have already laid the
foundations for a further significant step forward in profitability next year
through the success of our unbundling programme, and we expect customer growth
to continue, particularly in light of our value proposition.  In addition, our
ventures with Virgin and Best Buy are progressing well and offer incremental
growth opportunities.


Conference call

There will be a conference call for investors and analysts at 9.00 am this
morning.   The dial-in number is [phone], with an alternative Freephone
number - 1 888 935 4577 - for US callers.  The call will also be broadcast on
our website, www.cpwplc.com.  A replay will be available for seven days, for
which the dial-in number is [phone], or 1 866 883 4489 for US callers,
and the code is 9547197.


Next trading update

The next trading update will be on 14 April 2008, when we will publish Q4
connections and customer numbers and give further guidance on the full year
outcome.  We will also be hosting a morning of presentations for investors and
analysts on that day, in line with previous years.



For Further Information


For analyst and institutional enquiries

Roger Taylor                             07715 170 090

Peregrine Riviere                        07909 907193


For media enquiries

Shane Conway                             07932 199659



Anthony Carlisle                         07973 611 888

Citigate Dewe Rogerson                   020 7638 9571



Operating and Financial Statistics


Revenues


£m                                    13 weeks to 29 December 2007           39 weeks to 29 December 2007

                                   2007         2006       % change       2007         2006       % change
Distribution
Retail                              650          574          13%        1,606        1,440           12%
Insurance                            43           35          22%          123           99           24%
Ongoing                              24           17          34%           64           50           28%
Mobile                              133          132           1%          392          378            4%
Non-UK Fixed Line                    24           29        (17%)           75           83         (10%)
Dealer                               46           53        (14%)          137          154         (11%)
Eliminations                       (19)         (13)          45%         (40)         (31)           30%
Total                               900          827           9%        2,357        2,174            8%

UK Fixed Line
Business                             77           84         (9%)          232          237          (2%)
Residential                         273          174          57%          815          490           66%
Total                               349          258          36%        1,047          727           44%

Eliminations                       (16)          (3)          N/M         (31)         (10)          207%

Group Total                       1,233        1,082          14%        3,373        2,891           17%


Like for like data

                                 13 weeks to 29 December 2007            39 weeks to 29 December 2007

                                Revenue          Gross Profit          Revenue           Gross Profit

Group                             1.0%               3.1%               1.3%                 2.5%


Connections and store numbers


000s                           13 weeks to 29 December 2007            39 weeks to 29 December 2007

                               2007         2006        % change        2007         2006       % change
Connections*
Subscription                  1,303        1,177            11%        3,342        2,997           12%
Pre-pay                       2,150        1,909            13%        5,010        4,189           20%
SIM-free                        155          174          (11%)          443          415            7%
Group                         3,608        3,260            11%        8,795        7,601           16%

* Excludes Best Buy Mobile

Own stores                    2,207        1,884            17%
Franchises                      216          186            16%
Total stores                  2,423        2,070            17%


Customer bases

                                                      As at 29 December 2007

(000s)                                               2007            2006        % change

Insurance                                           2,405           2,207              9%

TPHT base                                           1,780           1,416             26%
TPHT subscription ARPU (£)                          23.25           23.54            (1%)
UK MVNO base                                          523             536            (2%)

Broadband base                                      2,604           2,155             21%
Of which unbundled                                  1,598             413             N/M
% unbundled                                           61%             19%
ARPU                                                22.08             N/A

Other billed customer base                          1,888           2,628           (28%)
ARPU                                                17.32             N/A

TalkTalk exchanges                                  1,533             569
AOL exchanges                                         924               -
Total unbundled exchanges                           2,457             569


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