Carphone Warehouse directors splash out on shares

Directors at mobile phone chain Carphone Warehouse have shown their faith in the company by splashing out £500,000 in shares.

Charles Dunstone, chief executive of the mobile phone chain, has spent £250,000 to increase his stake in the company to nearly 38%.

Chief operating officer David Ross has spent £200,000, and chief financial officer Roger Taylor has paid out £50,000.

The three made their move as Carphone Warehouse's share price stood at 130p, a third below its flotation price of 201½p last July.

The purchase also came only hours before Carphone Warehouse entered its closed period ahead of its annual results presentation on May 29.

Mr Taylor said the three felt the West London-based company was undervalued, and the shares looked cheap.

He said the company had been caught up by the gloom surrounding the telecoms sector and, in particular, concerns over lower sales of cheaper pre-pay mobile phones.

But Mr Taylor added that this was not Carphone Warehouse's main market. "Our market has not changed. We are confident of showing exceptionally good growth. We deserve a good rating."

Analysts are forecasting pre-tax profits of £48m for the year to March 31, compared with £25.1m a year earlier.