April 29, 2014 / 7:56 AM / 4 years ago

UPDATE 1-Carphone silent on Dixons talks as sales rise

(Adds detail, background, CEO comment)

LONDON, April 29 (Reuters) - Carphone Warehouse, Europe’s biggest independent mobile phone retailer currently in merger talks with Dixons Retail, reiterated full-year earnings guidance and posted a rise in fourth quarter revenue at its main CPW business.

The firm’s trading statement on Tuesday made no mention of the talks with Dixons, Europe’s No. 2 electricals retailer, for a possible 4 billion pounds ($6.72 billion) merger.

Britain’s Takeover Panel has imposed a May 19 deadline for the two firms to confirm whether they intend to press ahead with a deal that would create a group with about 2,900 stores across Europe and which would likely find a place in Britain’s FTSE 100 share index.

“We’ll update the market in due course,” Carphone CEO Andrew Harrison told Reuters, declining to elaborate on the progress of the talks, which were revealed to the market on Feb. 24.

Carphone’s shares are up 13.9 percent over the last three months, while Dixons’ are up 2.4 percent.

Carphone said revenue at CPW Group stores open over a year rose 2.3 percent in the three months to March 29, a seventh straight quarter of like-for-like growth, helped by growing sales of 4G superfast mobile broadband products.

That compares to third quarter like-for-like growth of 3.1 percent.

CPW’s like-for-like revenue was up about 4 percent in the UK and flat in Europe.

However, the firm said revenue at its Virgin Mobile France joint venture fell 8.6 percent, reflecting continued competitive activity in the French market. The joint venture’s postpay base of 1.3 million customers was down 17,000.

Carphone reiterated its full-year guidance for headline earnings per share of 17-20 pence, up from 12.3 pence in the 2012-13 year.

It narrowed guidance for CPW’s pro-forma headline earnings before interest and tax (EBIT), forecasting 145-155 million pounds compared to 140-160 million pounds previously.

Aside from the possibility of combining with Dixons, Carphone is increasing its scale through partnerships.

In the Netherlands it is rolling out a store-within-a-store format through a deal with Media-Markt Saturn and is in talks with Metro Group regarding a similar deal in Germany. It has also opened 31 Samsung stores in seven countries through a deal with the South Korean firm.

Shares in Carphone, up 60 percent over the last year, were down 0.5 percent at 307 pence at 0737 GMT, valuing the business at 1.77 billion pounds. ($1 = 0.5950 British Pounds) (Reporting by James Davey; editing by Kate Holton)

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