Carphone Warehouse 2006 Annual Report Download - page 14

52 WEEK SUBSCRIPTION
CONNECTIONS
UP 23.6% (000s)
’06’05’04’03
1,909
2,413 2,770
3,423
52 WEEK TOTAL CONNECTIONS
UP 26.0% (000s)
’06’05’04’03
4,364
5,350
6,503
8,191
AVERAGE SPACE UP 16.2% (sqm)
’06’05’04’03
63,233 66,170 75,619
87,871
Distribution Division continued
Connections (000s)
52 weeks 52 weeks 53 weeks
to to to
1 April 26 March 2 April
2006 2005 2005
Subscription 3,423 2,770 2,816
Pre-pay 4,252 3,227 3,272
SIM-free 516 506 512
Group 8,191 6,503 6,600
We opened 362 new stores during the year and
closed 45. The total number of stores increased
from 1,461 at March 2005 to 1,778 by March 2006.
The total includes 140 franchise stores (March 2005:
70 franchises). Total average selling space excluding
franchises increased by 13.3% to 83,128 sqm
(2005: 73,399 sqm) and sales per square metre
increased by 4.7% to £16,547 (2005: £15,807).
Total average selling space including franchises
increased by 16.2% to 87,871 sqm (2005: 75,619
sqm) and sales per square metre increased by 2.0%
to £15,654 (2005: £15,343).
Total Retail revenues grew by 18.6% and gross profit
by 23.1%. Like-for-like, after stripping out the impact
of new store openings and the 53rd week last year,
revenues grew by 5.9% and gross profit by 9.0%.
The increase in revenues was driven by the strong
connections growth through the year, though offset
by a fall in revenue per connection from £189.7
to £185.2 driven by a change in mix.
Average cash gross profit per connection rose
from £54.0 to £54.7. Gross profit per connection
for subscription and pre-pay rose 2.9% and 6.9%
respectively, with the average increase of 1.4%
reflecting a higher proportion of pre-pay sales.
Contribution from Retail grew by 26.4% to £127.5m.
The contribution margin rose from 8.7% to 9.3%,
reflecting the strong growth in like-for-like gross profit.
The ratio between contribution and gross profit, which
gives a more meaningful indication of cost efficiency
given the variability of revenues per connection,
improved from 30.6% to 31.4%. Overall Retail direct
costs grew by 21.6%, driven by the greater store
base and like-for-like growth in commission payments
to our sales consultants. Within these figures, total
rent costs increased by 17.3%, reflecting the rapid
increase in space over the last two years.
In the UK, our store portfolio increased from 601
stores to 669 stores. New stores continue to generate
an attractive return and the impact on existing outlets is
minimal. We see ample opportunity for further expansion
despite our significant presence, and aim to open a
further 80 stores in the UK in the current year. Our focus
is on retail park units, arterial routes and smaller towns.
Our businesses outside the UK continued to grow
strongly. Spain is now our second largest market
by some distance, with a portfolio of 338 stores.
Connections were up 23.7% on a 52 week basis.
During the year we acquired Planet Phone, a small
chain of stores acting as an exclusive distributor
for Telefonica Moviles.
Our French operations enjoyed a year of better growth
after a subdued period of trading, as competition
between the networks began to intensify. We opened
35 stores, taking the portfolio to 220, and achieved
52 week connections growth of 15.5%, with a better
performance in the second half. We are encouraged
by recent trends in France, with the launch of a
number of MVNOs, including our own Virgin Mobile
joint venture, set to stimulate the market further.
In The Netherlands and Sweden, our next most
important retail markets, connections fell marginally
year-on-year, after prolonged periods of strong market
growth. Both businesses continue to hold good
market positions and made significant contributions
to overall Retail profitability. They have returned to
growth in the new financial year, and we continue
to invest in new stores in these territories.
Across our other five markets, comprising Belgium,
Germany, Ireland, Portugal and Switzerland, we
generated 52 week connections growth of 22.4%,
with all countries trading well. Switzerland, in particular,
achieved a very good turnaround from the poor
performance in the previous year, and after 12 months
of recovery we now intend to invest in further organic
growth in that market.
Online connections increased by 61.7% year-on-year
to 0.76m on a 52 week basis. Revenues were
The Carphone Warehouse Group PLC Annual Report 2006
10
LIKE-FOR-LIKE GROSS
PROFIT UP 9.0%
5 YEAR SUBSCRIPTIONS
GROWTH OF 17.1%