Earnings: Carphone Profits Surge As Dongles, Economy Impact Broadband; Cautious Outlook

Carphone Warehouse profits rose 81 percent to £124 million ($242.39 million) in the year to March 29, on 12 percent better revenues of £4.47 billion ($8.73 billion).

But the group has a “cautious” outlook for the next year, “given the poor economic climate and inflationary pressures on European consumers”. It blamed the slowdown of the housing market and, intriguingly, the rise of mobile broadband sales for lower take-up of its broadband than expected, warning it expects lower revenue next year if the trend continues.

Carphone is betting its new JV with Best Buy will “give us a whole new avenue of potential growth in the wider consumer electronics market place”.

The company said a 15 percent rise in mobile connections to 11.5 million was primarily down to smartphones offering web and email, and to those wireless broadband dongles – both also expected to be the key growth areas over the next year.

Carphone incurred £15 million ($29.32 million) costs integrating AOL’s (NYSE: TWX) UK ISP business, which it bought in 2006. The acquisition made its first full-year impact, helping revenue up 29 percent to £1.4 billion ($2.73 billion) in the fixed-line division, which also includes Carphone’s own TalkTalk broadband. It’s reduced its reliance on BT’s (NYSE: BT) wholesale broadband network, serving 67 percent of its customers from its own net, up from 31 percent last year, and aiming for 80 percent next March. The group lost £6 million from its stake in Virgin Mobile.

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