People are still spending money on mobile phones

The profit rise for the 53 weeks to 2 April was accompanied by a 27% increase in sales, to �2.36bn from �1.85bn.

Connections rose 20% in the nine weeks to 4 June, and the firm said the coming year's prospects were "excellent".

Meanwhile, chief executive Charles Dunstone is to sell 2% of his shares, retaining one third of the group.

Mr Dunstone is selling six million shares, and will receive the average price that the shares trade at on Tuesday.

I think that when times get a bit rougher, it sorts people out. If you are good you can continue to do well, if not then you suffer Charles Dunstone, Carphone Warehouse Check Carphone's share price

The stock opened in London at 166p and this will make the chunk he is selling worth close to �10m.

He does not plan to sell any more of his stake.

'Simple formula'

Mr Dunstone set up Carphone Warehouse in 1989 using his savings of �6,000. It now operates in 10 countries and has more than 1,460 stores.

It also has attracted 920,000 customers in the UK to its TalkTalk residential fixed-line service over the past 24 months.

"We are now well on the way to developing a broad-based telecoms group, providing mobile and fixed line services to individuals and businesses across ten countries," said Mr Dunstone.

"Our formula is simple: we have a number of assets - our people, our stores, our fixed line network, our supplier relationships and a strong and motivated management team - that are highly valuable on their own, but even more powerful when uniquely combined."

New stores

The Carphone figures come on the day that figures from the British Retail Consortium shows that sales growth in the UK High Street is slowing.

But Mr Dunstone, who plans to open another 100 stores in the UK this year, said he was confident that younger consumers would continue to want new mobile phones.

He added: "I think that when times get a bit rougher, it sorts people out. If you are good you can continue to do well, if not then you suffer."

The outlook for Carphone's mobile services operations "is very promising", he said.