Carphone on track for broadband

Sales and profits at Carphone Warehouse soared in the year to April 1, but all eyes were on the progress of its free broadband service from TalkTalk as it revealed full-year results this morning.

Carphone affirmed that initial demand was 'significantly ahead' of expectations, with 340,000 customers signed up as of yesterday.

Revenue leapt 29.4 per cent to£3.05 billion, like-for-like retail sales were up 5.9 per cent and like-for-like gross profit up 9 per cent. Pre-tax profits rose 35.5 per cent to£136.1 million.

In a flurry of upbeat news, Carphone said connections increased by 26 per cent to 8.2 million and subscription connections jumped 23.6 per cent to 3.4 million. It opened 317 stores and now has 2.6 million TalkTalk customers in the UK, which equates to 10 per cent of the market.

Migration to unbundled lines - a key stage in the strategy - begins in July and the company said it is on track to deliver the first 200 unbundled lines by the beginning of next month. This is in line with its forecast of a£50 million loss in the first year, followed by profits of between£30 million and£40 million the following year.

Carphone chief executive Charles Dunstone said: 'Our Free Broadband Forever has exceeded our most optimistic expectations, with the result that we have connected more customers in the first eight weeks than we had planned in the first four months.'

Numis analyst Steve Davies said the figures were 'very encouraging' and added: 'Broadband customers only become profitable once their exchange has been unbundled. The initial news is encouraging and the group remains on course.'

If you have any comment to make on this story, click here.