Interim Management Statement

RNS Number : 6209Z
Carphone Warehouse Group PLC
18 January 2011
 



 

 

 

Tuesday 18th January 2011

 

Embargoed until 7am

 

Carphone Warehouse Group plc

 

Interim Management Statement for Q3 2010-11

 

EPS expected to be at the top end of existing range

 

·      CPW Europe Q3 LFL revenue up 0.7% (UK LFL up 2.3%)

·      Best Buy Mobile US Q3 connections up 33.6% to 2.2m

·      Guidance for Best Buy Europe's full-year profit share from Best Buy Mobile US raised to £90m-£100m (previously £85m-£95m)

·      Best Buy UK online successfully launched with strong performance to date

·      Significant customer base growth at Virgin Mobile France with net adds of 74,000

·      Reiterating financial guidance for the full year with EPS expected to be at the top end of the previously stated 13.5p-14.0p range

 

 

Roger Taylor, CEO, said:

 

"We've delivered another good quarter, we're again raising our guidance for our profit share from Best Buy Mobile US and we now expect full year earnings per share to be at the top end of the range we gave in November. CPW Europe has continued to perform well in a Christmas quarter where sales are traditionally much more weighted towards prepay handsets, the segment where smartphone penetration is still low, and where there have been high levels of price deflation in basic handsets. Best Buy Mobile US continues its strong momentum, demonstrating its winning formula. The online launch at Best Buy UK has gone well, adding to the strong customer satisfaction with our 'Big Box' stores, where our planned roll-out continues. Our other joint venture, Virgin Mobile France, is well on track to deliver growth and results in line with guidance."

 

 

Best Buy Europe

 

Best Buy Europe is our 50:50 joint venture with Best Buy Co., Inc. and comprises:

 

·      CPW Europe - predominantly trading under the Carphone Warehouse and Phone House brands;

·      a profit sharing agreement in Best Buy Mobile US, Best Buy's mobile phone retailing operations in the US; and

·      Best Buy UK, the newly launched 'Big Box' consumer electronics stores and online platform in the UK, branded Best Buy.

 

CPW Europe

 

Like-for-like sales growth was 0.7%, reflecting continued strong smartphone sales in the postpay segment. As anticipated, penetration of smartphones into the prepay category remained relatively modest, and prepay connections were down year-on-year, causing a drop of 7.1% in overall connections. Consistent with previous quarters the UK business performed strongly, with like-for-like sales growth of 2.3%, helping to offset tough economic conditions in a number of continental European markets.

The 'Wireless World' store format continues to perform well, bringing customers the latest and best products and services that the 'Connected World' has to offer. We currently have 73 'Wireless World' stores and remain on course to reach our target of 100 by March 2011.

 

Best Buy Mobile US

 

Best Buy Mobile delivered another impressive quarter, with connections growth of 33.6% to 2.2m. The business continues to increase the retail estate, rolling out new stand-alone stores and benefitting from an increased allocation of space within Best Buy's 'Big Box' stores. In driving market share, Best Buy Mobile has also invested in promotional activity and marketing, pioneering innovative propositions in the US market.

 

Best Buy Mobile now has 1,099 stores within a Best Buy store and 158 stand-alone stores. As previously guided, it is well on track to have over 175 stores by the end of the current financial year.

 

Because of Best Buy Mobile's continued momentum, we are again increasing our guidance for the full-year profit share, to £90m-100m (previously £85m-95m).

 

Best Buy UK

 

The performance of our first six 'Big Box' stores in their launch year has reaffirmed our belief in the substantial opportunity that exists within the consumer electronics market for our innovative, deep service-based proposition. The online offering launched before Christmas has seen a strong performance to date, particularly in home appliances, and is generating a high number of customers visiting the interactive site to get information and inspiration about technology before buying. Our planned store roll-out continues and we are broadening our online range throughout the coming year.

 

 

Virgin Mobile France

 

Revenue at Virgin Mobile France, in which we have a 47.1% stake, is in-line with expectations at €94m for the quarter. As anticipated in November, following the successful integration of Tele2 in the first half, Virgin Mobile France has refocused on customer acquisition and had a successful Christmas. Net additions in the quarter were 74,000 (41,000 year-to-date), buoyed by the launch of high-end smartphones, bringing the customer base to 1.76m and placing the business on track to meet the guidance of 50,000-100,000 net adds for the full year.

 

 

Outlook

 

Whilst we remain cautious on the economic environment across Europe, we are well positioned to take advantage of the strong product cycle in mobile phones and the 'Connected World'. We remain confident in achieving the full year guidance that we set out with our interim results in November and now expect EPS to be at the top end of the existing 13.5p-14.0p range.

 

 

Conference call

 

There will be a conference call for investors and analysts at 9.00 am this morning. The call will also be broadcast on our website, www.cpwplc.com.

Dial-in details - UK/International: +44 (0)20 7806 1953, USA: +1 888 935 4575, passcode 4911330. 

A replay will be available until midnight, 24 January 2011.

Replay dial-in details - UK/International +44(0)20 7111 1244, USA +1 347 366 9565, passcode 4911330#.

 

 

Next announcement

 

The Group will publish its Q4 trading update on 5th May 2011.



 

For further information

 

For analyst and institutional enquiries                       

           

Roger Taylor, CEO                                                         07715 170 090

 

Nigel Langstaff, CFO                                                      07802 210 248

 

Kate Ferry, IR Director                                                    07748 933 206

 

 

For media enquiries

 

Shane Conway, Corporate PR Manager                           07932 199 659 

                         

Anthony Carlisle (Citigate Dewe Rogerson)                       07973 611 888

           

                                                                                    020 7638 9571



Further operating and financial information

 

 



Best Buy Europe (100% basis)





13 weeks to 1 January 2011


39 weeks to 1 January 2011



2011

2010

% change


2011

2010

% change

Revenue


Total (£m)

1,033

996

3.7%


2,701

2,670

1.2%


LFL



0.7%




1.8%










Connections (000s)


CPW Europe / Best Buy UK

3,486

3,751

(7.1%)


9,235

9,635

(4.1%)


Best Buy Mobile US

2,236

1,674

33.6%


5,254

4,075

28.9%





















At 1 January 2011







2011

2010

% change





Store numbers


CPW Europe









Own stores

2,211

2,231

(0.9%)






Franchises

229

222

3.2%






Total stores

2,440

2,453

(0.5%)















Best Buy Mobile US









SWAS

1,099

1,068

2.9%






SAS

158

71

122.5%






Total stores

1,257

1,139

10.4%















Best Buy UK









Total stores

6

-

n/a





 

 

 

Virgin Mobile France (100% basis)












3 months to 31 December 2010


9 months to 31 December 2010



2011

2010

% change


2011

2010

% change

Revenue (€m) *

94

71

32.5%


282

171

64.7%










* Revenue excludes contributions towards subscriber acquisition costs from network operators and customers, to simplify presentation.

















At 31 December 2010






2011

2010

% change





Customer base (000s)

1,756

1,685

4.2%























 

 










 

 


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