krug3r
08-10-2003, 14:04
Carphone Warehouse, Europe’s largest independent mobile phone retailer, has reported a strong second quarter as it steps up efforts to become a force in fixed-line telecommunications.
The company also said on Wednesday it would pay an interim dividend of 0.4 penny per share, or one third of the anticipated full-year pay-out, following a strong quarter driven by heated competition among mobile networks, progress in Germany and surprising growth from its new British residential fixed-line service, talktalk.
With 140,000 customers at the end of September and 8,000 more signing up every week, Carphone raised its March 2004 target for talktalk to 350,000-400,000 subscribers and set a March 2005 target of 600,000-700,000.
"We’ve been given a good opportunity to grow this business, and we’re going to go for it over the next 18 months," Finance Director Roger Taylor told Reuters in a telephone interview.
The aggressive new March 2004 target compares with initial plans for up to 300,000 subscribers at the launch in February.
Talktalk not only represents part of a growing threat to the core business of former fixed-line monopoly BT Group , but it also lies at the heart of Carphone’s plan to be more of a telecoms service provider as growth slows in its core market for selling mobile phones.
But in writing off marketing and subscriber acquisition costs for talktalk, Carphone said growth would come at a cost of up to eight million pounds this year.
Shares in Carphone, which have doubled since April to within sight of two-year highs, fell 2.6 percent to 131 pence by midday.
"There had been a lot of buying in anticipation of the expansion of the talktalk business, which is why the shares have come off," one senior London-based analyst said.
Carphone said overall mobile connections rose 16.3 percent to 1.24 million in the second quarter. Subscription connections, from which Carphone takes a share of the revenue, rose 24 percent on the back of strong performances in France and Spain.
But due to a government tax fraud inquiry into the European mobile phone trade, Carphone said its wholesale business was subdued and would only break even this year if that continued. The unit accounted for some five million pounds in profits.
In Germany, Taylor said Carphone was no longer losing money. The purchase of mobile service reseller Hutchison this year allowed the "Phone House" there to sell more than just phones, like many of Carphone’s 1,140 outlets across 11 countries.
"Recurring" revenue from activities such as phone insurance and fixed-line subscriptions now make up 60 percent of profits.
Carphone releases first-half results on November 4. Analysts expect a full-year pre-tax profit of 70-75 million pounds.
The company also said on Wednesday it would pay an interim dividend of 0.4 penny per share, or one third of the anticipated full-year pay-out, following a strong quarter driven by heated competition among mobile networks, progress in Germany and surprising growth from its new British residential fixed-line service, talktalk.
With 140,000 customers at the end of September and 8,000 more signing up every week, Carphone raised its March 2004 target for talktalk to 350,000-400,000 subscribers and set a March 2005 target of 600,000-700,000.
"We’ve been given a good opportunity to grow this business, and we’re going to go for it over the next 18 months," Finance Director Roger Taylor told Reuters in a telephone interview.
The aggressive new March 2004 target compares with initial plans for up to 300,000 subscribers at the launch in February.
Talktalk not only represents part of a growing threat to the core business of former fixed-line monopoly BT Group , but it also lies at the heart of Carphone’s plan to be more of a telecoms service provider as growth slows in its core market for selling mobile phones.
But in writing off marketing and subscriber acquisition costs for talktalk, Carphone said growth would come at a cost of up to eight million pounds this year.
Shares in Carphone, which have doubled since April to within sight of two-year highs, fell 2.6 percent to 131 pence by midday.
"There had been a lot of buying in anticipation of the expansion of the talktalk business, which is why the shares have come off," one senior London-based analyst said.
Carphone said overall mobile connections rose 16.3 percent to 1.24 million in the second quarter. Subscription connections, from which Carphone takes a share of the revenue, rose 24 percent on the back of strong performances in France and Spain.
But due to a government tax fraud inquiry into the European mobile phone trade, Carphone said its wholesale business was subdued and would only break even this year if that continued. The unit accounted for some five million pounds in profits.
In Germany, Taylor said Carphone was no longer losing money. The purchase of mobile service reseller Hutchison this year allowed the "Phone House" there to sell more than just phones, like many of Carphone’s 1,140 outlets across 11 countries.
"Recurring" revenue from activities such as phone insurance and fixed-line subscriptions now make up 60 percent of profits.
Carphone releases first-half results on November 4. Analysts expect a full-year pre-tax profit of 70-75 million pounds.