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Mobile phone retailer Carphone Warehouse said on Wednesday it expects sales in the first half of the year to come in at the top end of expectations.
The company, which employs 200 in Ireland in more than 40 locations, said that the number of connections it sells, same-store revenue and like-for-like gross margin were all on the rise year-on-year since its last update at the end of July. In the July statement, the business said it connected 23.9 percent more customers, while same-store revenues rose 10.6 percent and like-for-like margins were up 9.2 percent over the 12-week period to the end of that month.
The good news sent Carphone shares up almost 6 percent in London just after lunch on Wednesday to STG0.83. Over the last 52 weeks, the company's shares reached their high point in December, when they were trading at around STG1.22.
With mobile phone penetration edging toward 75 percent in Europe as a whole, companies like Carphone Warehouse have been facing an increasingly difficult market. Sales of so-called replacement handsets and more sophisticated models were set to revitalise to sector, but so far mobile handset sales have not come close to the levels that were achieved two years ago.
Still, recent Dataquest figures show that the replacement market may be growing and that the fall-off in demand may have hit bottom. August research from the US-based company showed that global mobile sales edged 0.8 percent higher in the April to June quarter, with 98.7 million units sold in that period.
In an interview with Reuters earlier in the month, Carphone Warehouse chief executive Charles Dunstone said he expected the handset market to grow between 5 percent and 10 percent over the Christmas period, which has accounted for 45 percent of the business' annual sales in the past. He also said that Carphone Warehouse would outperform the market.
Around 56 percent of mobile phones sold by the firm in September were priced over STG100, Dunstone added, compared with around 27 percent in April, evidence that consumers are starting to look to pricier models that include options such as colour screens, cameras or high-speed data abilities.
In fact, in March Dunstone admitted in a statement that "the mobile phone business has changed dramatically in the past 18 months and will continue to change further." In order to cope with that change, the company said it would focus on selling more mobile data services on behalf of mobile operators, as well as the more sophisticated phones that go with these services.
That announcement, however, came alongside a plan to shut 89 shops across Europe in areas where sales had been especially poor. No shops were closed in Ireland, a market the company has consistently said it was pleased with.
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