British mobile phone retailer Carphone Warehouse has turned in sharply higher profits, defying signs of a slowdown in consumer spending.

The company said on Wednesday that pre-tax profits for the six months to late September came in at �12m ($16.8m), 25% up on the same period last year.

Turnover climbed 19% on the year to �433.8m, driven in part by a 21% increase in mobile phone connections.

Carphone Warehouse added that it was "quietly confident" that sales during the all-important Christmas season would be strong.

The mobile phone industry is hoping that new picture-messaging handsets will drive bumper sales growth in the run-up to Christmas this year.

Bouncing back

The company's latest results underline its recovery from an unexpectedly sharp slump in handset sales one year ago.

Carphone's sales fell by 9% during the final three months of 2001 as the handset market approached saturation, forcing the firm to issue a profit warning and close some of its loss-making continental European stores.

The firm said on Wednesday that its performance on mainland Europe had improved, with losses in its key German market falling by half compared with the same period last year.

Carphone Warehouse chief executive Charles Dunstone told Reuters that the firm would sell its German business if it did not move towards profitability next year.

Fixed line expansion

Carphone also announced on Wednesday that it had bought Opal Telecom, a UK-based firm which supplies fixed-line voice services to small and medium-sized businesses, for �65m.

The company said it planned to offer Opal's fixed line services to consumers through its chain of High Street shops.

Carphone Warehouse chairman Hans Snook said he expected the Opal acquisition to boost profits within one year.

Last year, Opal made profits of �3.2m before tax and one-off costs on sales of �92.3m.

City investors reacted cautiously, marking Carphone Warehouse shares down 9p to 88p in early trade.