Markets lap up Carphone Warehouse

Shares in Carphone Warehouse shot up five per cent this morning as the company cheered shareholders with news of a climbing market share.

The company's full-year pre-tax profit fell, as expected, to £46.8m - a 5.6 per cent drop. However, this was in line with analysts' estimates, and not as bad as earlier warnings had suggested.

The best news for investors was Carphone Warehouse's UK market share figures, which rose from 12 per cent last year to 20 per cent this.

Falling demand for mobile phones has seen many of the company's smaller rivals close, with the number of outlets in the UK shrinking by 25 per cent, according to Carphone Warehouse chief executive Charles Dunstone, speaking to analysts.

Carphone Warehouse sells a high proportion of contract phones, rather than pre-paid, which has protected it from the worst of the downturn.

The group's performance has been bolstered by growth in high-margin businesses such as selling insurance. This has helped to offset the effects of an almost saturated handset market and falling subsidies from mobile phone operators.

Sales for May were up 12 per cent from the year before, and margins were up 16 per cent.

Hans Snook, founder of Orange and recently appointed Carphone Warehouse chairman, said the group expects to continue building market share and open 100 new stores across Europe.

Dunstone also reiterated his scepticism about the prospects for mobile data services in the immediate future.

He said: "We're not relying on mobile services or 3G to come this year."

Shares in Carphone Warehouse were up over seven per cent in morning trading.

Dunstone has dismissed mobile data services before