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A cautious outlook and a fall in broadband sales, linked to the slowing property market, sent shares down at Carphone Warehouse.

By the afternoon, shares in the retailer had fallen 9.11 per cent to 207p, following the release of preliminary results for the year.

Carphone Warehouse said headline pre-tax profit was up 75 per cent to £216 million and like-for-like gross profit was up 4.7 per cent.

The sharp increase in profits reflect the steep losses Carphone Warehouse incurred last year, when it launched free broadband. This year, the retailer is offering a free laptop with the purchase of broadband, and "early indications are positive", according to the group.

Total connections – the sale and activation of a mobile phone – were up 15 per cent over the year, with new technology and fashion driving sales, Carphone Warehouse said.

Despite the positive figures, the retailer was less enthusiastic in its outlook.

'"We remain cautious in our outlook for the year ahead, given the poor economic climate and inflationary pressures on European consumers," Carphone Warehouse said in a statement.

"After several years of sustained growth in the European handset market, we estimate that over the last 12 months the market has been flat or marginally down year-on-year," the retailer added.

In addition, broadband numbers were down over the year. Carphone Warehouse said: "Broadband net adds so far this year are lower than expected. The slowdown in the housing market and a strong performance in mobile broadband sales in our stores have led to lower gross adds."

The lower revenues expected this year will be offset by higher margins, the retailer added, as more customers are opting to stay with the company.