Carphone raises £10m from shares sale

The boss of Carphone Warehouse today said he was cashing in shares worth around £10m (€14.9m) as the firm rang up a 34% hike in annual pre-tax profits.

Chief executive Charles Dunstone said he was selling six million shares – the first time he has sold any since the group’s stock market flotation in 2000.

He was due to receive the average price of the shares during trading today, with the stock opening at 166p. This compared with the flotation price of 201.5p.

Mr Dunstone, who will be left with just over a third of the group after offloading 2% of his stake, said he did not plan to sell any further shares. No reason was given for the sale.

The move came as the high street phone specialist met City forecasts with profits of £102.1m (€152m) and reported a strong performance since the start of its new financial year.

It said a 20% rise in connections in the nine weeks to June 4 was particularly encouraging in the face of weaker consumer spending in the UK. This figure compared with a 21.6% increase in the year to April 2.

The company, which opened its first stores outside the UK in Dublin and Paris in 1996, now operates in 10 countries and has more than 1,300 stores.

Carphone said intense competition between mobile networks would translate into “compelling offers” for its customers, and that this should continue as users switched to 3G technology.

Current trading was strong across all of its divisions with similar rates of growth in both subscriptions and pre-pay deals.

Mr Dunstone said the TalkTalk UK fixed line business, which had 920,000 UK customers by the end of the period, had “all the ingredients to become the major alternative force in UK residential communications”.

The company increased its number of UK stores from 509 to 601 over the year and planned to open a further 100 in the next 12 months. It said it had continued its strategy of picking sites in retail parks but had also been successful in opening outlets in smaller towns.

Its businesses outside the UK delivered “encouraging” growth, led by Spain where connections increased by 40% during the year.

Group turnover increased by 27% to £2.36bn (€3.5bn) and the total dividend was raised to 1.8p from 1.3p.