Carphone Warehouse 2002 Annual Report Download - page 5

The Carphone Warehouse Group PLC Annual Report 2002 3
Charles Dunstone, Chief Executive Officer
last year, and the closure of over 100 retail stores across Europe.
Our Distribution platform however continues to grow and our focus
is to improve the quality of our store portfolio, now consisting of 1,104
stores across twelve European markets. In the coming year we anticipate
opening another 100 new stores.
The core retail proposition and customer service guarantees
developed in the UK have also been extensively rolled out into our other
European markets, with increasing focus on the quality of our offering.
Our retail business has never been in better
shape and is more focused and more efficient
than ever. We will be maximising the potential
from this position in the coming months
Our online division also continues to prosper and our insurance business
has experienced strong growth throughout the year, as we have
continued to roll out this offering across Europe.
As set out last year we have continued to invest in our strategy of
generating revenue beyond the point of sale and the Telecoms services
business now manages over one million customers across five different
networks. Revenue for this business has increased by nearly 200% and
more importantly the contribution has almost doubled during the year.
The Telecoms services business encompasses our facilities
management operations on behalf of network operators, with 864,000
customers, as well as management of 155,000 of our own customers in
both the UK and France.
As well as providing significant contribution, highlights in Telecoms
services this year include the integration of CMC, the French Telecoms
services business acquired in May 2001, and the establishment of a 250
strong call centre in Le Mans, France. In addition we have also secured
facilities management contracts with Vodafone in the UK and are looking
at similar arrangements with additional European networks. Altogether
this is a significant change in activity from where we were only twelve
months ago.
In the Data services business following the restructuring, we have
focused on generating a profitable business and have extended our
operations to focus on a wide range of text messaging based products
and services.
Looking ahead, the next twelve months will bring significant
opportunities. As for new technology, the network operators are
beginning to launch more advanced data services platforms, and the
manufacturers more advanced products with additional customer
focused applications. The stimulus for widespread usage of ‘next
generation’ mobile technology will however ultimately be the arrival of
good quality content that is simple and straightforward to use. This is
likely to arrive later in 2002 and become more widespread in 2003. A
growing replacement market will continue to introduce customers to new
handset models, capable of more advanced services. We will endeavour
to provide an increasing quality of advisory services to assist customers
in this upgrade process.
We have continued to invest in our strategy to
generate revenue beyond the point of sale.
Recurring revenues generated 45% of our
contribution during the year
This year will see the entrance of new network operators which will
invigorate the European mobile communications market. In the UK,
Hutchison is due to launch its 3G network and services in the fourth
quarter of 2002. The European market has also been stimulated by the
recent consolidation and rebranding of other networks including O2and
T-Mobile across their European operations, and during the period Orange
and Vodafone have also become Pan-European brands.
The launch of new handsets by the mobile phone manufacturers will
also continue to drive customer interest and repeat purchases. In
particular we are expecting innovative new products from Nokia, Sony
Ericsson, Siemens and Samsung. Picture messaging services, Bluetooth
technologies and new games applications for mobile phones should also
stimulate customer demand this year.
This changing environment is clearly creating new opportunities for
The Carphone Warehouse and in this regard, I am very pleased to
welcome Hans and the experience, guidance and vision he brings to the
Group as Chairman.
Our continued success is thanks to the dedication and expertise of
all our 7,500 employees. This year we have employed a further 2,000
employees to strengthen and extend the service that we offer our
customers. Our success is also thanks to the ongoing strength of our
management team, the support of our investors, business partners and
suppliers.
As this year has clearly demonstrated, we continue to succeed in a
business environment that has been challenging but also offers great
opportunity for the future. During these next twelve months, we intend
to retain and build on our position as Europe's leading independent
retailer of mobile phones and services, and believe we are perfectly
positioned to benefit from the opportunities that the mobile
environment will offer.