Interim Results

Carphone Warehouse Group PLC
7 November 2001

Strictly embargoed until 0700 hours Wednesday 7 November 2001

                       The Carphone Warehouse Group PLC

                     Interim Results to 29 September 2001
                       26 weeks ended 29  26 weeks ended 23   53 weeks ended 31
                          September 2001          September          March 2001

                                                       2000

                                      £m                 £m                  £m
Turnover                           539.6              447.9             1,110.7
Gross Profit                       140.1              115.3               280.6
EBITDA pre MViva                    24.0               17.1                70.8
MViva                              (2.4)              (1.5)               (4.8)
EBITDA                              21.6               15.6                66.0
Profit before tax                    9.6                8.0                49.6
Headline earnings                  0.89p              0.69p               5.00p
per share

(Stated before exceptional items and amortisation of goodwill)

  * 20% growth in turnover to £540m
  * 38% growth in EBITDA to £21.6m and headline EPS growth of 29% to 0.89p
  * 14% growth in connections to over 1.5m with Group mix improving by 7% in
    favour of high value subscription to 55%
  * UK mix improved by 10% to 58% in favour of subscription
  * 30% growth in Group subscription connections
  * Retail like for like gross profit growth of 2% against a market that is
    estimated to be down 40%*
  * Recurring revenue increased from £32m to £69m
  * Over 915,000 telecoms customers under management in the UK and France
  * All new Carphone Warehouse customers on Vodafone will be managed by
    Carphone Warehouse telecoms services
  * Extensive growth opportunity within our key European markets in our
    distribution and telecoms services divisions
  * In the five week period to 3 November 2001, connections of 308,000 and
    mix of 59% in favour of subscription, an improvement of 11%. Growth in
    subscription connections of 22%. Retail like for like gross profit growth
    of 2%

*Source GFK, network data and management estimates

 Chairman & Chief Executive, Charles Dunstone said

Our continuing success has been driven by a significant increase in market
share and considerable growth in high quality recurring revenue. This has been
achieved in a period of tremendous change in the mobile telecoms sector and
demonstrates our ability to benefit from this change.

We have now seen the networks shift their focus away from pure customer
acquisition to customer retention and value development. In addition, the
market is increasingly focused on handset replacement rather than first time
buyers. These factors play directly to our strengths.

Our performance over the last six months demonstrates our ability to attract
higher spending customers with our mix profile continuing to significantly
outperform the market and increase in favour of more valuable subscription
customers.

Our proven track record in providing specialist, independent advice and a
unique portfolio of services and products ideally positions us to take
advantage of this new environment.

In both the UK and mainland Europe we have grown our market share
considerably. This has been achieved through the continued rollout of our core
retail proposition, an increase in brand awareness and further development of
our close relationship with European network operators.

During the period, we have also made very good progress on our strategy to
build the proportion of our revenues that recur annually through development
of our insurance business, additional share of customer spend, and providing
after sales customer billing and services in our facilities management
business.

In the UK, we provide these facilities management services for all customers
our stores connect to BTCellnet and we have been contracted to do the same for
Vodafone as from October 2001. In France, CMC, which we acquired in May, is
performing well. We now provide continuing billing and customer service to
almost one million customers across the UK and France and intend building this
business actively.

In addition we have restructured our data services division aligning it more
closely with our distribution business. The MViva brand now encompasses mobile
services such as targeted text messaging, audio texting, ringtones, icons and
our mobile internet portal. As at the end of this period, we have transformed
the financial performance of this division and we are confident that this
trend will continue.

Outlook

We have in place a number of initiatives to ensure that we are well placed to
maximise the opportunities this Christmas and are confident of gaining further
market share and a strong performance relative to the market.

In the changing market we will continue to develop our proven customer
proposition, build our brand awareness and continue to attract and retain a
high spending, valuable customer base. This strategy will perfectly position
us to sustain and grow our leading market position across Europe.

We will reinforce our retail business and we will be continuing to establish a
full range of telecoms and data services operations across our core European
markets. This will allow us to continue to generate valuable recurring revenue
streams aligning our interests even further with European network operators.

In summary we are very well placed to take advantage of the new opportunities
in the new mobile telecoms environment and build our position as Europe's
leading distributor of mobile communications products and services.

Group performance

Turnover for the period ending 29 September 2001 increased 20% to £539.6m and
EBITDA before exceptionals increased 38% to £21.6m. Headline EPS in the period
increased by 29% from 0.69p to 0.89p.

Distribution

The distribution business generated total revenues of £496.4m (2000 £436.0m)
and contribution of £35.2m (2000 £32.1m), an increase of 10%.

Our mix profile across the Group improved considerably from 48% to 55% in
favour of subscription connections. This is even more marked in the UK, where
it has changed from 48% to 58%. The number of new subscription customers
increased by 30% across the Group compared to the same period last year.

The retail business connected over 1.4m customers, an increase of 14% (ex
Tandy) and retail gross profit in comparable stores shows a 2% growth in gross
profit against a -5% drop in revenue. The reduction in like for like revenue
is a direct function of the trade from our various suppliers and their
respective share of our business. As such, focus is given to our like for like
gross profit figure as a key indicator of our performance.

Our store portfolio increased from 1,009 at September 2000 to 1,085
representing good organic growth and, as anticipated at our full year results,
we have successfully completed our re-organisation in non-key markets.

The average gross profit of both subscription and prepay connections has been
maintained at the high levels achieved last year. This, combined with change
in mix to subscription connections, has provided substantial growth in our
overall distribution performance.

Our online sales enjoyed strong growth and the insurance business continues to
perform well, with growth in our policyholder base of 36% to over 888,000.

Our wholesale activities produced revenue of over £175m (2000 £127m) and made
a valuable contribution.

Telecoms services

In telecoms services we achieved a 268% increase in revenue to £42.3m (2000 £
11.5m) and contribution of £16.1m (2000 £7.0m).

This reflects a strong increase in both our continuing share of customer spend
and even more significantly in the number of customers we manage.

In telecoms services we now manage over 915,000 customers for a variety of
European network operators, reflecting strong organic growth coupled with the
acquisition of CMC.

Data services

Data services revenue has increased to £0.9m (2000 £0.4m). During August and
September, the performance of this division has substantially improved as a
result of developing new products and services. We have taken steps to ensure
that this progress is continues for the remainder of this financial year and
beyond.

Exceptionals and cash flow

As anticipated at the full year we have incurred costs of £1.9m in completing
the closure of non-key retail stores in mainland Europe, in addition to the £
2.9m provided last year. In addition we have incurred £1.2m on the
reorganisation of our data services division. Last year exceptional income of
£16.5m arose as a result of the investment in MViva by AOL.

The cash movements in the period reflect the cash outflow of £41m for the
acquisition of CMC in France and capital expenditure of £21.5m. This level of
capital expenditure is significantly less than that incurred last year and is
reflective of the anticipated run rate for the future. Working capital was
affected by the Group taking advantage of early settlement discounts offered
by our suppliers.

Current trading

Trading for the five-week period to 3 November 2001 reflects connections of
308,000 and an 11% improvement in our mix profile to 59.4% from last year in
favour of subscription. The growth in our subscription connections is 22%.
Like for like gross profit has grown by 2%. Our insurance base has now risen
to 895,000 and our telecoms services base to 938,000.

Ends

For further information

The Carphone Warehouse Group PLC         07771 868 601

Charles Dunstone                         020 8753 8573

Roger Taylor

Tristia Clarke

For analyst and institutional inquiries  07801 580 090

Roger Taylor

Hugh Roberts

 Citigate Dewe Rogerson                  07973 611 888

Anthony Carlisle                         020 7638 9571



                               FINANCIAL REVIEW

Consolidated profit and loss account for the 26 weeks ended 29 September 2001

                           Before  Exceptional        After
                      exceptional    items and  exceptional
                        items and amortisation    items and
                     amortisation              amortisation
                                                             Restated  Restated
                         26 weeks     26 weeks     26 weeks  26 weeks  53 weeks
                         ended 29     ended 29     ended 29  ended 23  ended 31
                        September    September    September September     March
                             2001         2001   2001 £'000     2000*
                                                                          2000*
                            £'000        £'000                  £'000     £'000
               Notes
Turnover         2        539,590                   539,590   447,910 1,110,678
Cost of sales           (399,527)                 (399,527) (332,630) (830,126)
Gross profit              140,063                   140,063   115,280   280,552
Operating
expenses
(excluding
depreciation
and                                               
amortisation)    3      (118,506)      (1,190)     (119,696) (99,656) (214,536)
EBITDA                     23,955      (1,190)       22,765    17,133    70,787
pre-MViva
MViva losses              (2,398)                   (2,398)   (1,509)   (4,771)
EBITDA           2         21,557                    20,367    15,624    66,016
Depreciation             (12,719)                  (12,719)   (8,808)  (18,788)
Amortisation                    -      (6,570)      (6,570)   (3,597)   (8,771)
Operating                   8,838                     1,078     3,219    38,457
profit
Exceptional      3              -      (1,898)      (1,898)    13,014     6,555
items
Net interest                  720                       720     1,191     2,385
receivable
Profit (loss)
on ordinary
activities                  9,558                     (100)    17,424    47,397
before
taxation                                              
Tax on profit    4        (2,392)          728      (1,664)   (2,027)  (11,998)
on ordinary
activities
Profit (loss)
on ordinary
activities                  7,166                   (1,764)    15,397    35,399
after taxation
Minority                      273          134          407   (1,130)     (563)
interests
Retained                    7,439                   (1,357)    14,267    34,836
profit (loss)
for the period
Earnings per
share
Basic            5              -                   (0.16p)     1.74p     4.57p
Headline         5          0.89p                         -     0.69p     5.00p

* Prior period earnings have been restated to reflect the impact of FRS 19 on
the taxation charge for the period.

All material gains and losses are included in the Consolidated profit and loss
account.

              Consolidated balance sheet as at 29 September 2001
                                                             Restated  Restated
                                    Notes          29    23 September  31 March
                                            September     2000* £'000     2001*
                                                 2001
                                                                           £000
                                                £'000
Fixed assets
Intangible assets                             271,953         233,309   231,471
Tangible assets                               131,497          90,383   120,278
Other investments                              44,851          39,671    44,426
                                              448,301         363,363   396,175

Current assets
Stock                                          63,939          59,371    52,437
Debtors                                       144,609         113,181   149,200
Investments                                    47,907          35,240    46,374
Cash at bank and in hand                       41,504          78,203    67,517
                                              297,959         285,995   315,528
Creditors: Amounts falling due              (260,054)       (184,734) (222,348)
within one year
Net current assets                             37,905         101,261    93,180
Total assets less current                     486,206         464,624   489,355
liabilities
Creditors: Amounts falling due                (9,190)        (14,890)  (14,107)
after more than one year
Provisions for liabilities and               (40,890)        (35,081)  (36,803)
charges
Net assets                                    436,126         414,653   438,445

Capital and reserves
Called-up share capital                           833             819       833
Share premium                                 356,290         353,070   356,235
Capital redemption reserve                         30              30        30
Profit and loss account                        77,693          58,479    79,660
Equity shareholders' funds            9       434,846         412,398   436,758
Minority interests                              1,280           2,255     1,687
Total capital employed                        436,126         414,653   438,445

* Prior period balance sheets have been restated to reflect the impact of FRS
19 on the taxation charge for prior periods.

  Consolidated cash flow statement for the 26 weeks ended 29 September 2001
                                                  26 weeks   26 weeks  53 weeks
                                                     ended      ended     ended

                                                        29         23  31 March
                                          Notes  September  September      2001
                                                      2001       2000
                                                                          £'000
                                                     £'000      £'000
Net cash inflow from operating activities            2,013      1,380    43,663
Returns on investments and servicing of                720      1,191     2,385
finance
Net cash outflow from taxation                     (3,989)    (1,777)   (6,991)
Net cash outflow from capital expenditure         (21,534)   (87,684) (141,687)
and financial investment
Net cash outflow from acquisitions and            (41,005)   (23,575)  (18,818)
disposals
Net cash outflow before management of             (63,795)  (110,465) (121,448)
liquid resources and financing
Net cash inflow from management of liquid                -        196       196
resources
Net cash inflow from financing                      39,914    170,844   168,608
(Decrease) increase in cash in the period   8     (23,881)     60,575    47,356



   Reconciliation of net cash inflow from operating activities to operating
                                    profit


                                               26 weeks     26 weeks   53 weeks
                                                  ended        ended      ended

                                           29 September 23 September   31 March
                                                   2001         2000       2001

                                                  £'000        £'000      £'000
Operating profit before exceptional items         8,838        6,816     47,228
and amortisation
Depreciation of tangible fixed assets            12,719        8,808     18,788
EBITDA                                           21,557       15,624     66,016
Loss on disposal of tangible fixed assets            72            -         31
Decrease in provisions                          (2,012)      (4,521)   (11,256)
(Increase) decrease in stock                   (11,376)      (2,578)      5,187
Decrease (increase) in debtors                   19,544     (10,648)   (54,248)
(Decrease) increase in creditors               (25,772)        3,503     37,933
Net cash inflow from operating activities         2,013        1,380     43,663

 Notes to the accounts

For the 26 weeks ended 29 September 2001

1 Basis of preparation and accounting policies

The interim financial information has been prepared on a basis consistent with
the basis of preparation and accounting policies set out on pages 30 to 31 of
The Carphone Warehouse Group PLC annual report for the 53 weeks ended 31 March
2001, with the exception of the policy on deferred tax. Financial Reporting
Standard (FRS) 19 'Deferred Tax' has been adopted with effect from 1 April
2001. FRS 19 requires that deferred tax be recognised in respect of all timing
differences that have originated, but not reversed, by the balance sheet date.
Prior to 1 April 2001 the Group's accounting policy was to provide for
deferred tax only to the extent that a liability or asset was expected to
crystalise in the foreseeable future. The prior year comparatives have been
restated to comply with FRS 19, as detailed in note 4.

The information set out in this interim report for the 26 weeks ended 29
September 2001 does not comprise statutory accounts within the meaning of
section 240 of the companies Act 1985. The statutory accounts for the 53 weeks
ended 31 March 2001, incorporating the unqualified auditors' report, have been
filed with the Registrar of Companies.

2 Segmental analysis

Divisional contribution is analysed as follows:

                      26 weeks ended       26 weeks ended     53 weeks ended

                      29 September 2001    23 September 2000   31 March 2001
                      Turnover      EBITDA Turnover   EBITDA  Turnover   EBITDA

                         £'000       £'000    £'000    £'000     £'000    £'000
Distribution           496,411      35,222  435,953   32,149 1,079,143  101,160
Telecoms services       42,272      16,114   11,529    6,960    30,481   18,125
Data services              907     (2,398)      428  (1,678)     1,054  (5,265)
Common costs                 -    (27,381)        - (21,807)         - (48,004)
                       539,590      21,557  447,910   15,624 1,110,678   66,016

Net assets by division are analysed as follows:
                                                     Restated          Restated

                    29 September 2001       23 September 2000     31 March 2001

                                £'000                   £'000             £'000
Distribution                  355,570                 342,327           363,970
Telecoms services              31,157                  15,652            21,802
Data services                  49,399                  56,674            52,673
                              436,126                 414,653           438,445

Acquisitions generated turnover of £22.5m (2000 £28.8m) and an operating
profit of £1.4m (2000 £0.6m) in the period.

Contribution by geographical location is analysed by origin as follows:

                    26 weeks ended       26 weeks ended     53 weeks ended

                    29 September 2001    23 September 2000    31 March 2001
                    Turnover      EBITDA Turnover   EBITDA   Turnover   EBITDA

                       £'000       £'000    £'000    £'000      £'000    £'000
United Kingdom       366,650      37,050  288,748   30,154    749,160   91,118
Rest of Europe       172,940      11,888  159,162    7,277    361,518   22,902
Common costs               -    (27,381)        - (21,807)          - (48,004)
                     539,590      21,557  447,910   15,624  1,110,678   66,016

There is not a material difference between turnover by destination and
turnover by origin.

Net assets by geographical location are analysed as follows:
                                                    Restated           Restated

                   29 September 2001       23 September 2000      31 March 2001

                               £'000                   £'000              £'000
United Kingdom               394,406                 384,796            391,220
Rest of Europe                41,720                  29,857             47,225
                             436,126                 414,653            438,445



3 Exceptional items
                                              26 weeks      26 weeks   53 weeks
                                                 ended         ended      ended

                                          29 September  23 September   31 March
                                                  2001          2000       2001

                                                 £'000         £'000      £'000
Cost of fundamental reorganisation  (i)        (1,150)       (3,500)    (4,530)
Profit on disposal of subsidiary   (ii)              -        16,514     16,514
undertakings
Loss on disposal of fixed assets   (iii)         (748)             -    (5,429)
Other closure costs                (iii)       (1,190)             -          -
Net (expense) income                           (3,088)        13,014      6,555



 i. Cost of fundamental reorganisation

    A charge of £1.2m has been made during the period in respect of the
    reorganisation of the Group's data services division following greater
    alignment with the distribution business and the delivery of new products
    and services.

    Charges in the period ended 31 March 2001 relate to the integration of the
    head office and retail operations of Antika Retail Limited (trading as
    Tandy) into those of the other UK operations.

ii. Profit on disposal of subsidiary undertakings

    In the period ended 23 September 2000, the Group entered into a strategic
    partnership agreement with AOL Europe S.A. to provide funding,
    functionality, content and services to the Group's subsidiary MViva
    Limited, whereby AOL Europe paid $25m for a 15% interest, resulting in a
    profit of £16.5m.

iii. Loss on disposal of fixed assets and other closure costs


    As anticipated in the full year results to 31 March 2001 the Group has
    incurred costs completing the closure of non-key stores across mainland
    Europe. As a result of these closures an additional loss on disposal of
    fixed assets of £0.75m has been incurred, above the £2.9m provided last
    year, together with other closure costs of £1.2m.

    The charge in the period ended 31 March 2001 included the above £2.9m and
    a further £2.5m loss arising from the disposal of certain investments.



4 Tax on profit on ordinary activities

Taxation has been provided using the estimated effective rate of taxation for
the year ended 30 March 2002 of 25% (year ended 31 March 2001 27%), amounting
to a charge of £2.4m.

As explained in note 1, the Group has adopted FRS 19 with effect from 1 April
2001 and in accordance with the standard, has restated prior period figures to
reflect this. The effects of the adjustments are to increase the tax charge by
£0.8m in the period to 23 September 2000 (full year effect £3.3m). Net assets
have correspondingly been increased by £3.3m at 25 March 2000 and by £2.5m at
23 September 2000; net assets at 31 March 2001 are not affected. Basic
unadjusted earnings per share for the period ended 23 September 2000 have been
restated from 1.9p to 1.7p (full year from 5.0p to 4.6p).



5 Earnings per share

The calculations of basic earnings per share are based on the following
profits or losses and numbers of shares:
                                                      Restated         Restated

                                  26 weeks   26 weeks ended 23   53 weeks ended
                                     ended     September 2000*    31 March 2001
                                        29
                                 September
                                      2001
Weighted average number of         832,646             755,100          763,002
shares (000's)
Basic earnings for the             (1,357)              13,146           34,836
financial period (£'000)
Headline earnings for the            7,439               5,234           38,179
financial period + (£'000)

Earnings per share - basic
Unadjusted                         (0.16p)               1.74p            4.57p
Headline +                           0.89p               0.69p            5.00p

* Weighted average number of shares and minority interests have been adjusted
for 113 million shares issued in exchange for certain minority shareholdings
pre-flotation.

+ Before amortisation of goodwill and exceptional items.



6 Dividends

No interim dividend is proposed.

7 Acquisitions

In May 2001, the Group acquired the entire issued share capital of
Communication de Mobiles Cellulaires S.A., a French telecoms services
business, for a net cash consideration of £41.0m.

8 Analysis of changes in net debt

                          At 31 March  Foreign Cash flows  At 29 September 2001

                                 2001 exchange      £'000                 £'000

                                £'000    £'000
Cash at bank and in hand       67,517     (82)   (25,931)                41,504
Overdrafts                   (10,423)      (4)      2,050               (8,377)
                               57,094     (86)   (23,881)                33,127
Debt due within one year        (114)        8   (39,894)              (40,000)
Finance leases                  (434)        -         35                 (399)
Net funds (debt)               56,546     (78)   (63,740)               (7,272)


9 Shareholders' funds

The reconciliation of shareholders' funds is as follows:

                                                     Restated          Restated

                                 26 weeks   26 weeks ended 23 53 weeks ended 31
                                    ended      September 2000        March 2001
                                       29               £'000             £'000
                                September
                                     2001

                                    £'000
(Loss) profit for the period      (1,357)              15,104            38,159
as previously stated
Prior period adjustment                 -               (837)           (3,323)
(Loss) profit for the period      (1,357)              14,267            34,836
as restated
Foreign exchange movements          (559)               (769)             (383)
Other movements                      (51)             (1,902)           (1,676)
Issue of new shares                    55             353,289           356,468
Net movement in shareholders'     (1,912)             364,885           389,245
funds
Opening shareholders' funds       436,758              47,513            47,513
Closing shareholders' funds       434,846             412,398           436,758