Past network upgrades, product launches and overseas acquisitions have started to rekindle growth at Vodafone (VOD). The mobile titan grew organic service revenues by about 2 per cent and kept a tight grip on costs in the reported period, driving adjusted cash profits up 4 per cent to €7.9bn (£6.8bn).
Better trading in the consumer and enterprise divisions meant organic service revenues inched upward in Europe and leapt 7 per cent in Africa, the Middle East and Asia-Pacific. Both organic service revenues and cash profits rose across all of Vodafone's reported territories except the UK, partly due to a botched move to a new billing system. Regulator Ofcom found the accounts of nearly 10,500 customers weren't credited when they topped up, and recently slapped the group with a £4.6m fine.
Vodafone benefited from robust demand for mobile internet: data traffic surged by more than 60 per cent, and its 4G user base ballooned by more than a quarter to nearly 59m. However, it booked a €6.4bn impairment charge in India, reflecting spectrum costs and fierce competition.
Ahead of these results, broker Jefferies expected adjusted cash profits of €15.76bn, giving EPS of 7.21¢, compared with €15.84bn and 6.90¢ in FY2016.
| VODAFONE (VOD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 204.2p | MARKET VALUE: | £54.3bn | |
| TOUCH: | 204.1-204.2p | 12-MONTH HIGH: | 240p | LOW: 198p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | NA | |
| NET ASSET VALUE: | 277¢* | NET DEBT: | 54% | |
| Half-year to 30 Sep | Turnover (€bn) | Pre-tax profit (€bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 (restated) | 28.2 | 0.15 | -9.4 | 4.65 |
| 2016 | 27.1 | -5.39 | -18.4 | 4.74 |
| % change | -4 | - | - | +2 |
Ex-div: 24 Nov Payment: 3 Feb £1=€1.16 *Includes intangible assets of €51.9bn, or 195¢ a share | ||||
