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Carphone Warehouse eyes improved earnings Thursday, 14th June 2012
Photo credit: My Retail Media
Carphone Warehouse is intent on remaining positive after the mobile phone retailer forecast a slight rise in 2013 earnings at its key European unit. After revamped stores and new products lining the shelves, the group was able to come in at the lower end of its target for 2012.
With the Eurozone crisis and double dip recession as a backdrop, Carphone Warehouse suffered a rocky year to 31 March, seeing European high street revenues drop 5.5 per cent to £3.3 billion. The retailer attributed the loss to the overhaul of its German arm and a drop in pay-as-you-go sales of up to 40 per cent in some markets.
Earnings before interest and tax at its European unit came in at £135 million for the year to the end of March, unchanged since the previous year and at the tail end of the company’s £135-£150 million forecast range. However, the group remains optimistic, forecasting a slight rise in 2013 full-year earnings.
"Looking ahead, we expect the consumer environment in Europe to remain difficult, but we see opportunities as well as challenges and we are confident in our strategic positioning and operational execution," chief executive Roger Taylor said in a statement as reported by Reuters.
Taylor went on to add that the group is managing its costs well, stating: "Our operating expenses line is down £30-£40 million year-on-year. Our cost management is pretty good. We're continuing to look at cost opportunities."
Taylor said Carphone Warehouse would launch in China at the end of June, with its partner Best Buy with about 15 stores due to open in the following weeks.
Overall, group profit before tax rose to £762.2 million from £67.2 million the previous year, reflecting the disposal of Best Buy Mobile. The company returned £813 million to shareholders from that deal.
In light of the results, analysts at Singer Capital Markets said:“The stock has fallen by 23 per cent over the last 3 months but held up better in the last month, falling less than 5 per cent. The shares could go better today given the recent slump.”