Carphone Warehouse has been hit by continuing weakness in the prepay mobile market, but it still expects to meet City expectations for its full year performance.
It has reported a 5.5% fall in like for like sales at its European retail business, but there was a strong performance from Virgin Mobile in France where revenues grew by 21%. It has returned £813m to shareholders from the disposal of its failed European joint venture with US group Best Buy. Chief executive Roger Taylor said:
We expect to deliver full year profits for Carphone Warehouse Europe in line with guidance, despite the market shift from 18 to 24 month contracts, a material decline in the prepay market and a tough consumer environment. Virgin Mobile France has been robust against the increased competition.
It has high hopes for expanding beyond the cellular market, with tablets, accessories, applications and content all areas for growth. The company has launched a range of smartphone and tablet accessories called App-cessories (really) and it hopes to roll this out to 150 stores by the summer. Carphone's shares have jumped 5p to 137p following the update.
But analysts at Espirito Santo pointed out that - despite being "robust" - Virgin France had lost customers after the launch of a mobile service by Iliad, and could continue to see its market share eroded.
