More southern European woe has masked stronger growth in western Europe and the US at mobile phone giant, Vodafone. The weak euro has weighed on free cash flow, which slumped 13.4 per cent to £6.1bn. Although management say dividends will continue to rise by at least 7 per cent per year – which leaves the shares still worth buying.
Encouragingly, data is still driving growth, thanks to continued smartphone penetration – data revenues jumped 22 per cent and now generate 14.5 per cent of group service revenues. Geographically, however, European service revenues slipped 0.6 per cent to £29.9bn with continued declines in Spain, Greece and Italy offsetting growth in western Europe. Vodafone has taken a £4bn hit on these troubled regions, on top of last year's £6.2bn charge. Still, Vodafone's share of profits from its 45 per cent stake in US group Verizon Wireless grew 9.3 per cent to £4.9bn. Emerging territories are doing well, too, with cash profits from India advancing 23 per cent to £1.1bn, while South Africa's Vodacom boosted cash profits 11.3 per cent to £1.9bn.
Prior to these figures Charles Stanley was forecasting pre-tax profit for 2013 of £10.39bn, giving EPS of 16.6p.
VODAFONE (VOD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 168p | MARKET VALUE: | £82.9bn | |
| TOUCH: | 167-168p | 12-MONTH HIGH: | 182p | LOW:150p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 156p* | NET DEBT: | 31% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 35.5 | 9.00 | 12.6 | 7.57 |
| 2009 | 41.0 | 4.19 | 5.84 | 7.77 |
| 2010 | 44.5 | 8.67 | 16.4 | 8.31 |
| 2011 | 45.9 | 9.50 | 15.2 | 8.90 |
| 2012 | 46.4 | 9.55 | 13.7 | 9.50 |
| % change | +1 | +1 | -10 | +7 |
Ex-div: 6 Jun Payment: 1 Aug *Includes intangible assets of £59.5bn, or 121p per share | ||||
