Q4 2013-14 Trading Update

RNS Number : 7118F

Carphone Warehouse Group PLC

29 April 2014

 



29 April 2014

Embargoed until 7am

Carphone Warehouse Group plc

Q4 2013-14 Trading Update (13 weeks ended 29 March 2014)

 Narrowing CPW Headline pro forma EBIT range

and reiterating full year Headline EPS guidance1

·     Q4 like-for-like revenue up 2.3%, reflecting continued strong UK performance

·     Strong operating cash generation in line with full year guidance

·     4G momentum driving incremental ARPU

·     31 CPW-operated Samsung stores now open

·     Narrowing Headline pro forma EBIT range to £145m-£155m for CPW (previously £140m-£160m) and reiterating Group Headline EPS guidance for the full year (17.0p-20.0p)¹

Andrew Harrison, CEO said:

"We continued to show good momentum, with further growth in like-for-like revenues, against strong comparatives. The mobile market continues to see a fall in prepay connections; but this has been compensated by an increase in 4G penetration, with higher levels of data take-up at a pricing premium, and consequential growth in customer ARPU. Our executional focus remains strong, with our tablet-based sales tool, 'Pin Point', continuing to drive customer satisfaction and conversion, to the benefit of customers, network operators and ourselves. We are also making good progress in our partnership and Connected World Services strategy and have now opened 31 Samsung stores in 7 countries, with approximately 30 more stores to be opened in the first phase. We are reiterating our Headline EPS guidance and narrowing our Headline pro forma EBIT range¹."

1 The directors of Carphone Warehouse Group plc confirm that the profit guidance for the year ended 29 March 2014 remains valid. The

directors further confirm that the profit guidance has been properly compiled on the basis of the assumptions stated and that the basis of accounting used is consistent with the company's accounting policies.

CPW

Q4 like-for-like revenue growth was 2.3%, maintaining the momentum seen during our Christmas quarter, despite strong comparatives. Overall connections were down 10.1%, reflecting continued weakness in the prepay market (down an estimated 20-25%). However, our sustained focus on higher-value postpay connections led to further UK market share gains in this category.

In Europe, we remain focused on replicating the UK's operational excellence across other markets and increasing our relevance and scale through partnerships. In the Netherlands we are making good progress with the roll-out of our store-within-a-store format in partnership with Media-Markt Saturn. Discussions continue with Metro Group in Germany, where we anticipate opening stores over the coming months, and with other potential partners across other territories.

Across the Group we are gaining further momentum in driving data-rich 4G services, seeing significantly higher levels of data take-up compared to the prior period and continuing to see a pricing differential for these additional data services.

Connected World Services

To date we have opened 31 Samsung stores in 7 countries with approximately 30 more stores to be opened across Europe in phase one.

We have been building an exciting pipeline of potential partners during the quarter and expect to make further announcements in due course.

Virgin Mobile France (46% joint venture)

Continued competitive activity in the French market resulted in the postpay base of 1.3m customers being marginally down (net loss of 17,000 postpay customers in the quarter) with revenue down in Q4 as anticipated (-8.6%). Virgin Mobile France remains focused on improving the quality of its base, continuing to make good progress with the Full MVNO migration, with 77% of customers on the Full MVNO platform as at the year-end and significantly more by value. Virgin Mobile France launched a new 4G proposition in April with both SFR and Bouygues Telecom, our third network partner, providing opportunities to access new parts of the market.

Management conference call

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

Dial-in details

Passcode: 9082561

UK/International: [phone]

USA: [phone]

A replay will be available until midnight, 6 May 2014.

Passcode: 9082561

UK/International: [phone]

USA: [phone]

For further information

For analyst and institutional enquiries

Kate Ferry, Investor Relations Director          [phone]

Kerry Becker, Investor Relations Manager     [phone]

For media enquiries

Anthony Carlisle (Citigate Dewe Rogerson)   [phone] / [phone]

Elizabeth Holloway, Head of PR, CPW          [phone] / [phone]

Further operating and financial information

CPW (100% basis)
Revenue*			13 weeks to 29 March 2014							52 weeks to 29 March 2014
	LFL (constant currency)		2.3%							5.3%
*Excludes Phone House France, which is in the process of closure, in both periods.
Connections*				13 weeks to 29 March 2014						52 weeks to 29 March 2014
				FY14		FY13		% change		FY14			FY13		% change
	Connections (000s)			1,893		2,106		(10.1%)		8,355			8,922		(6.4%)
*Excludes Phone House France, which is in the process of closure, in both periods.
			At 29 March 2014
Store numbers*			FY14		FY13		% change
	Own stores		1,732		1,792		(3.3%)
	Franchises		292		268		9.0%
	Total stores		2,024		2,060		(1.7%)
*Excludes Phone House France, which is in the process of closure, in both periods.
Virgin Mobile France (100% basis)
			3 months to 31 March 2014								12 months to 31 March 2014
Revenue*			FY14		FY13		% change				FY14	FY13		% change
		Revenue (€m)	103		113		(8.6%)				410	472		(13.1%)
*Revenue excludes contributions towards subscriber acquisition costs from network operators and customers, to simplify presentation.
			At 31 March 2014
Customer base (000s)			FY14		FY13		% change
		Postpay	1,316		1,348		(2.4%)
		Prepay	354		365		(3.0%)
		Total	1,670		1,713		(2.5%)

 

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