The company, Europe's biggest independent mobile phone retailer, said pre-tax profits for the year to late March came in at �57m, up from �46.8m one year earlier.

It also announced plans to turn around its loss-making German operations through the acquisition of Hutchison's German mobile services firm, at a cost of �46.8m.

The deal will hand Carphone a German subscriber base of nearly 700,000, and will allow it to sell mobile services as well as handsets in Germany.

The company added that it would be paying its shareholders their first dividend, set at one penny per share.

"The group has made significant progress over the last twelve months, both in the execution of our strategy and in the financial results we have achieved," said Carphone chief executive Charles Dunstone.

"Over the next year, we intend to build on our position as the leading independent retailer of mobile phones and services in Europe, and deliver further profitable growth."