Carphone poised for £100m record

CARPHONE Warehouse's full-year profits look set to top £100m for the first time after the retailer reported a 25% rise in sales from its shops in the key third quarter, which covers Christmas.

Chief executive Charles Dunstone said: 'Looking ahead we believe the market conditions will continue to play to our strengths, and we are confident of delivering a full-year result ahead of market expectations.'

The consensus forecast is currently for profits of £98.6m against £76.3m in the year to March 2004.

The latest health scare over radiation from mobiles, particularly affecting children, has had little immediate impact, according to Dunstone.

He said: 'We don't actually sell a lot of phones to under eight-year-olds. It did seem a bit late to issue a warning after Christmas when all the sales have taken place. And, in reality, nothing new was said. We get a sense from our customers that there is a slight fatigue among people who are being told not to eat salt or use their phones.'

In the 13 weeks to Christmas Day like-for-like retail sales rose by 11.2% but gross profits from retail rose by only 4.3% reflecting the high demand for pre-pay and SIM-free phones.

The top seller for Christmas was the basic Nokia 1100 pre-pay, which Carphone sold for £19.99. At the other end of the scale, 3, the Hutchison-owned third generation network, was popular with its cheaply priced voice packages supporting a good range of handsets.

{2} Dunstone does not believe that the real demand for 3G will take off until the second half of this year. He said Vodafone had seen some good demand, particularly in Spain and Portugal, with Orange doing likewise in France.

Revenues from fixed lines including TalkTalk rose by 58% to £99.7m. Opal, the business phone service, passed on all the cuts enforced by Ofcom for calls from fixed lines to mobiles straight to its customers and so saw average revenue per minute fall by more than 10% since September.

TalkTalk added 114,000 customers in the UK, taking its base to 762,000.

Carphone shares rose 10p to 168p.