Carphone has more cash to boost Best Buy

The group, which yesterday opened its sixth "big box" outlet, in Derby, said customer feedback had been "highly encouraging" but that it needed more marketing activity than initially planned.

As a result it now expects losses from Best Buy UK to be in the range of 50 million to 55m, up 10m on its forecast in April.

The Best Buy megastores have thrown down the gauntlet to rivals such as Currys owner DSG International and Comet operator Kesa Electricals by offering American style service and initiatives such as a trade-in service.

Carphone's Best Buy Europe business, which also includes its high street mobile phone stores, is a 50-50 joint venture with US firm Best Buy.

Carphone raised its guidance for full-year results yesterday after strong demand for smartphones led to a sharp jump in its share of profits from Best Buy Mobile US, the mobile phone retailing operation in the US.

It said its core stores in Europe continued to perform strongly with like-for-like revenues up 2.4 per cent in the first half of the year and leading to a 56 per cent uplift in earnings to 44m.

Chief executive Roger Taylor said: "We have delivered a strong first half with good performances across all our businesses, and we are raising our guidance for the full year."