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Vodafone expects inflation to squeeze cash flow

Price pressures will cause medium-term pressures but these results don't change the long-term investment case.
Vodafone expects inflation to squeeze cash flow
  • Free cash flow slightly below guidance
  • African growth continues

Vodafone (VOD) is always looked at in comparison to BT (BT). The challenges facing management are the same. Rising inflation, increasing interest rates and the cost of living crisis. These factors make investment and financing more expensive whilst also making it trickier to raise prices in what is already a very competitive market.

The main difference between the two is the geographies in which they operate. BT has a global business which makes up 16 per cent of its revenue but the rest of its sales comes from the UK. BT's fate is tied to that of the UK economy. Vodafone is much more international, just 15 per cent of its revenue is derived from the UK while the rest is generated in continental Europe and Africa.

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