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Charles Dunstone, the chief executive and co-founder of Carphone Warehouse Group, was more than £100 million worse off at one stage yesterday after shares in the high street retailer and broadband provider plummeted to a five-year low. The reason: his own warning that the group was facing its toughest year ahead.

“For a lot of retailers, it is about staying alive and the ones who are left standing after all of this are the ones who will prosper in the long run,” Mr Dunstone said as the group announced a drop in first-half profits.

“If anyone can survive, it should be us.” However, he was under no illusion that the next 12 months would be among the hardest that the business had faced.

Shares in Carphone Warehouse, Europe's biggest independent mobile phone retailer, closed down 12p, or 9.4 per cent, at 118p, yesterday, wiping £35.7 million from the value of Mr Dunstone's 32.6 per cent stake in the group. Earlier, however, they had fallen to a five-year low of 95p, reducing the value of his holding by £102 million.

In little over a year Mr Dunstone's shares have fallen in value from £1.1 billion to £351 million yesterday as the group's stock has been driven down by fears of slowing broadband growth and the prospect that a recession will hit consumer spending in its stores.

The entrepreneur, who co-founded Carphone Warehouse in 1989 with £6,000 in savings, said that the outlook for the retail business was “very uncertain” and that predicting Christmas sales was “very hard”.

About 60 per cent of sales come from the second half of the year, with December contributing double the sales of the normal monthly average.

Mr Dunstone used the half-year results to confirm that he was considering splitting the business between its retail and broadband units. This follows the group's £1.1 billion retail joint venture with Best Buy, the American electronics group, six months ago. The venture is planning to open a chain of large electronics stores in Britain, branded Best Buy Europe.

Mr Dunstone said that the board had started a formal review of the group's corporate structure but no advisers had been appointed yet. He added that the demerger did not preface a sale of any part of the group, adding that there had been no approaches for TalkTalk, the group's broadband business, which has 2.8 million customers.

Mr Dunstone said that he wanted “an operational role in both [sides]“. “This is really post the Best Buy joint acquisition, where we've had to separate the businesses more and TalkTalk is at arm's length,” he said. “One shareholder said to me: ‘If these businesses were separate, would you put them together?'

“We'll come back with more thoughts in the spring. It's not something that's going to happen overnight but it's worth asking the question.”

Roger Taylor, Carphone Warehouse finance director and Best Buy Europe chief executive, said that despite Best Buy's profit warning last week, after “seismic changes” in consumer behaviour, the joint venture plans continued “full steam ahead”, with the first of 100 megastores due to open in the UK next summer.

Mr Dunstone said: “We just want to open our stores, get it right and see how customers respond to them.

Carphone's half-year net profit for the 26 weeks to September 27 stood at £39 million, down from £44 million in 2007, on revenues down 2 per cent to £697 million. Earnings per share of 4.2p were down 15 per cent from 5p last year.

The company said that profits had been distorted by last year's acquisition of AOL. Carphone has restated figures to take account of the Best Buy deal.

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