Carphone Warehouse, Europe's largest mobile-phone retailer, has reported a surge in first-half profits.

But the retailer's mainly positive figures could not disguise a sharp slowdown in recent weeks.

In the six months to end-September, Carphone Warehouse's pre-tax profit climbed by 20% to �9.6m - somewhat towards the lower end of analysts' expectations.

Turnover rose in line with profits, to �540m, and the firm was buoyed by a 30% surge in subscription mobile-phone connections, which are more profitable than pay-as-you-go deals.

Trading in the weeks since the US attacks has, however, been more tricky.

The firm said that retail like-for-like profit rose by only 2% in the five weeks to 3 November.

Still growing

Charles Dunstone, Carphone Warehouse chairman and chief executive, said the firm had continued its aggressive growth strategy during the half-year.

Heavy investments in its retail network - including expansion overseas - had allowed the firm to continue growing in a market that was shrinking fast, Mr Dunstone said.

According to research firm GfK, retail demand for mobile phone handsets and connections is currently down 40% year on year.

And investors shied away from the company, wary of the impact of falling sales over the key Christmas period.

Carphone Warehouse stock lost 15.5% of its value during the day's trading, to close at 108.5p.