Carphone Warehouse Group has reported like for like sales up 3% in its European business in its fourth quarter, as the group gears up to open its first Best Buy store in the UK this Friday.
For the full year to March 2010 in its first update from the demerger with Talk Talk, Carphone Warehouse Europe reported an EBIT of £114m, up from £97m the previous year. The group has made an operational investment of £21m into Best Buy UK, broadly in line with its guidance.
The group said it expects like-for-like sales of between 0-3% from Carphone Warehouse Europe in the year to March 2011, with gross margins continuing to strengthen.
At EBIT level, it expects 15-20% growth at Carphone Warehouse Europe, with a loss of £40-£45m for Best Buy UK.
Best Buy UK will make its debut on Friday in Thurrock.
Carphone Warehouse chairman Charles Dunstone said: “We have ended 2010 with another strong performance and given our third upgrade in six months. Carphone Warehouse Europe continues to trade strongly. Our full year results are ahead of expectations and our operating free cash flow is well ahead and represents a transformational improvement on the prior year.
“The demerger is now successfully completed, and we are moving into our next phase of growth. Our vision of the ‘Connected World’ resonates with customers, as do our principles of impartial advice and knowledgeable service. This Friday, we open our first UK Best Buy ‘Big Box’ store; Best Buy Mobile continues to show good potential in the US; Carphone Warehouse Europe continues to roll out its ‘Wireless World’ format; and Virgin Mobile France is now moving into profit.
“The macro environment will undoubtedly present challenges but we are well positioned in each of our businesses and we are targeting 40% to 45% EPS growth for our 2011 financial year with further strong cash generation in both of our joint ventures.”