Carphone Warehouse maintains guidance despite UK sales drop

Carphone Warehouse has seen a decline in like-for-like (LFL) revenues in its Europe divison (essentially the UK operation) but expects full-year earnings to be on target.

CPW Europe, a 50% joint venture with US firm Best Buy, saw LFL revenues down 5.5%. In the UK, the firm estimates pre-pay revenues were down 30-40% "driven by a lack of attractively-priced smartphone products and a weak consumer environment".

The company is clearly aiming at revenues from tablets and accessories as opposed to simply phones. Currently these revenue streams are "very small" but show "significant" potential.

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The Virgin Mobile France business (100% owned by CPW) has kept customer numbers steady at 1.9m while revenues grew to €125m in the three months to the end of March from €104m in the same period of 2011. Over the last 12 months revenues increased 17.5% to €453m.

The Chief Executive Roger Taylor said of the update: "We expect to deliver full-year profits for CPW 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, seeing a return to postpay customer growth in March and delivering significant revenue growth for the quarter."

CPW shares were up 4% at 11:53.

BS