Carphone Warehouse 2002 Annual Report Download - page 7

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The Carphone Warehouse Group PLC Annual Report 2002 5
Stores by country
Ireland 29
UK 461
Portugal 42 Spain 115
France 151
Switzerland 20
Sweden 53
Germany 82 Poland 3
Czech Republic 22
Netherlands 81
Belgium 45
enjoys with the French network operators, which has also been reinforced
by the Telecoms services operation acquired during the year.
The performance of our Spanish business is evidence of our ability
to manage a turnaround in difficult market conditions. With a change of
management, a strengthening of our relationship with our key network
partners and a re-engineering of a number of business processes, we
have transformed our performance in this country. Our businesses in
Portugal and Ireland also performed well in a rapidly changing market
place, reflecting the strength of the management in place.
Our operations in Sweden and The Netherlands experienced a
difficult period of trading, particularly in the earlier part of the year, but
following intensive management focus both are showing signs of good
recovery to the levels of profitability we would expect from these
fundamentally good operations.
Germany and Belgium have however proved to be very challenging
and we have incurred additional losses compared to the previous year in
both markets. Following a change of management and specific store
closures, we are confident that we have taken steps to significantly
reduce the rate of these losses, although further action and time is
required before we can enjoy a full turnaround. Needless to say intensive
management focus is being given to these operations.
Our additional distribution channels have also contributed to our
success during the last twelve months. The online business, which
includes our direct sales team and our website operations, continues to
perform well and during the last twelve months we connected over
196,000 customers. This division contributed revenue of £36.7m to the
Group's turnover and strong operating profits, and we are constantly
seeking new opportunities in this area.
We have considerably increased the reach and performance of our
insurance business. Our insurance products are now available in eleven
of our twelve markets and this business allows us to secure profitable
recurring revenue streams for the Group. During the last twelve months,
the insurance business generated £60.4m revenue and our customer
base increased by 18% to over 939,000, our growth rate in mainland
Europe was over 40%.
Our wholesale division's performance during the last twelve months
is reflective of the handset market decline. Whilst revenue was only
marginally down on the previous period, at £343.0m against £348.0m, a
significant proportion of the revenue generated in the current period was
from the wholesaling of airtime vouchers at relatively low margins, and
as such the net contribution was down by £8.6m year on year. We will
continue to conduct these activities in the future as they complement our
overall Distribution operations and we will explore opportunities to
enhance their profitability.