Carphone Warehouse sales soar

The figures, unveiled at today's annual meeting of shareholders in Ealing, west London, are the first for a comparable period since the mobile network operators decided to stop subsidising the cost of pre-paid mobiles in May 2001.

Carphone, led by founder and chief executive Charles Dunstone, said that over the 17 weeks up to 27 July sales soared by 16% to 1.16 million phones, of which 557,000 were higher-value subscription connections.

The figures are even more spectacular for the 12 weeks since 5 May, with connections up by 24% and like-for-like revenues across the group 10.6% higher with a 9.6% improvement in gross margins.

Chairman Hans Snook told shareholders: 'We are confident that our retail marketplace has now established a firm level and that, within this market, Carphone Warehouse will continue to benefit from its growing market share, high quality sales mix and increasing quality of earnings.'

Snook said this was reflected in the fact that just over a million people used Carphone's telecoms service and just under a million had taken out its insurance. The group saw opportunities to improve its position in the after-sales market and to capitalise on the new generation of phones being launched.

Dunstone said that the most immediate technology coming to his shops was picture messaging, which allows customers to take and send photos to each other's phones.

Carphone began selling the Nokia 7650, the first handset available in volume to do this, in some of its outlets last week and has begun some 'sampling', showing it off around a number of bars in the City of London. He said the reaction had been fantastic.

At the moment the phones can be used to take photos that can be emailed to personal computers. Phone-to-phone delivery will come in October when the network operators announce charges for this service.

Dunstone urged them to keep the costs affordable. 'About twice the cost of texting, say 20p to 25p - and they must ensure that you can send to rival networks so, say, a Vodafone customer can send pictures to an Orange subscriber,' he said.

Carphone had several hundred Nokia 7650s in stock, he added, but would not predict what demand might be in the run-up to Christmas.

Shares in Carphone were down 5 1/2p to 80p by early afternoon.