Vodafone announces results for the six months ended 30 September 2018

[idpickering]

·

Group revenue of €21.8 billion and loss for the financial period of €7.8 billion, primarily due to a loss on the disposal of Vodafone India (following the completion of the merger with Idea Cellular) and impairments

Organic service revenue (excluding handset financing, IAS 18 basis) up 0.8%** and Q2 up 0.5%** with good commercial and financial performance in most markets offset by increased competition in Italy and Spain


·Growth drivers: good momentum in fixed broadband (384,000 net adds) and convergence (616,000 net adds); Vodafone Business grew 1.0%*, led by strong growth in IoT; Emerging Consumer up 7.4%* driven by data growth


·Organic adjusted EBITDA up 2.9%** (excluding handset financing and settlements, IAS 18 basis), supported by a third consecutive year of net reduction in operating expenses


· Updating full year guidance: underlying organic adjusted EBITDA growth narrowed to c.3% (previously 1-5%); Free cash flow (pre-spectrum) raised to c.€5.4 billion (previously 'at least €5.2 billion')
·
Stable interim dividend per share of 4.84 eurocents; full year dividend per share expected to be in-line with FY18

And later;

Dividend policy

The Board currently intends to propose a total dividend of 15.07 eurocents per share for the current financial year, in-line with the FY18 dividend, with an interim dividend of 4.84 eurocents (also stable YoY). The Board will consider growing the dividend per share over the long-term, once the Group's financial leverage has reduced towards the lower end of the revised target range of 2.5x-3.0x net debt / EBITDA.

https://www.investegate.co.uk/vodafone- ... 00131233H/

[Walrus]

On first glance doesn't look disasterouus.

FCF better than expected, continuing cost reductions and hinting at monetizing existing assets. On the face of it appear to be ok but lots of accounting jargon and not sure I follow the 0.8bn outflow 're India. Certainly better than I expected.

[moorfield]

Thanks Ian - looks and smells like a held dividend for now ?

[idpickering]

Thanks Ian - looks and smells like a held dividend for now ?

You're welcome moorfield, it seems so. At least it's not been cut. I'm likely to top up my VOD holdings for this month's dollop. You'd think the fag shares would get the nod, but I don't think the Southward trend there is over. I could always do both I guess?

Ian.

[IanTHughes]

Dividends
Dividends will continue to be declared in euros and paid in euros, pounds sterling and US dollars, aligning the Group's shareholder returns with the primary currency in which we generate free cash flow. The foreign exchange rate at which future dividends declared in euros will be converted into pounds sterling and US dollars will be calculated based on the average exchange rate over the five business days during the week prior to the payment of the dividend.
The Board currently intends to propose a total dividend of 15.07 eurocents per share for the current financial year, in-line with the dividend for the year ended 31 March 2018, and have announced an interim dividend of 4.84 eurocents (also stable year-on-year). The ex-dividend date for the interim dividend is 22 November 2018 for ordinary shareholders, the record date is 23 November 2018 and the dividend is payable on 1 February 2019. Dividend payments on ordinary shares will be paid directly into a nominated bank or building society account.

Ian

[maximan]

Well at least the market liked them on opening 10p up as I write.

[monabri]

Well at least the market liked them on opening 10p up as I write.

Keep writing!

[jackdaww]

Well at least the market liked them on opening 10p up as I write.

=================

good news.

i'm a long time fan of vod , but now planning to reduce .

[Dod101]

Not as bad as might have been, but yet another held dividend. This is not what it is supposed to be about.

Dod

[idpickering]

Not as bad as might have been, but yet another held dividend. This is not what it is supposed to be about.

Dod

Agreed. I'm happy to take a step back, and accept that such things are going to happen at times. I'm glad I have 32 different holdings in my HYP, and am well diversified though, which allows me to relax a bit maybe. After yesterday, the 6% (as I type) rise in VOD sp is welcome.

Ian.

[Wizard]

Dividend policy

The Board will consider growing the dividend per share over the long-term, once the Group's financial leverage has reduced towards the lower end of the revised target range of 2.5x-3.0x net debt / EBITDA.

I do not hold, but if I did or was thinking about it I would want to know what the current position on that ratio is, that way I may get some idea of how long it may be until the dividend has a chance of being increased.

Terry.

[idpickering]

Dividend policy

The Board will consider growing the dividend per share over the long-term, once the Group's financial leverage has reduced towards the lower end of the revised target range of 2.5x-3.0x net debt / EBITDA.

I do not hold, but if I did or was thinking about it I would want to know what the current position on that ratio is, that way I may get some idea of how long it may be until the dividend has a chance of being increased.

Terry.

Your cautious words are welcome. and in an ideal world, so would I to be honest. Something to mull (Pickering) over I guess.

Ian.

[daveh]

Dividend policy

The Board will consider growing the dividend per share over the long-term, once the Group's financial leverage has reduced towards the lower end of the revised target range of 2.5x-3.0x net debt / EBITDA.

I do not hold, but if I did or was thinking about it I would want to know what the current position on that ratio is, that way I may get some idea of how long it may be until the dividend has a chance of being increased.

Terry.

Well the report says net debt is 32.1billion euros and they say full year EBITDA will be in the range 14.3-14.5 billion euros so I make the ratio as 2.24 using the lower figure which is below the lower end of their target range - not sure what I've done wrong.

Net debt as at 30 September 2018 was €32.1 billion compared to €29.6 billion as at 31 March 2018. This reflects free cash flow generation in the period of €0.9 billion, proceeds from Verizon loan notes of €2.1 billion, offset by FY18 final dividend payments of €2.7 billion, spectrum purchases of €1.0 billion (including €0.6 billion for the Italian auction, which was ongoing at the period end), and a net cash outflow to India from Vodafone Group of €0.8 billion in connection with the Vodafone Idea transaction.

and

Consistent with prior guidance, we now expect to grow our adjusted organic EBITDA by around 3% in FY19, excluding the impact of UK handset financing in both years, and the significant benefit in the prior year from regulatory settlements in the UK and a legal settlement in Germany. Based on guidance FX rates, and under IAS 18 accounting standards, this implies an adjusted EBITDA range of €14.3-14.5 billion* for the year.

*The value for the half year was €7.1 billion so not unreasonable a value for the full year.

[Dod101]

I found these numbers too. I concluded that it must be the word 'adjusted' that is throwing it. I assume that they will use the actual reported figure (which I have not yet found)

Dod

[Walrus]

I found these numbers too. I concluded that it must be the word 'adjusted' that is throwing it. I assume that they will use the actual reported figure (which I have not yet found)

Dod

Maybe taking into account the expected debt obligations surrounding the Liberty acquisition versus the uplifted cash flows?

[moorfield]

Well at least the market liked them on opening 10p up as I write.

The market was pricing for a cut perhaps, so the rise today isn't unexpected and welcome.

(Coincidentally, my "< 2* benchmark yield" check brings VOD yield back into topuppable range on these results. Take that with a pinch of salt mind, some here suggest it to be nonsense, but I'm satisfied I've avoided a potential yield trap by my own definition for the last few months.)

Not as bad as might have been, but yet another held dividend. This is not what it is supposed to be about.

Yes and No, depending on your point of view. "Drawers" may feel the squeeze of the held dividend more than "Builders", the latter can be more sanguine while they are reinvesting for a future income, although both should rightly be concerned if a held dividend becomes a bad habit after a few years, a la MKS.

[Dod101]

As a drawer, as you put it, I am feeling the draft. Not just Marks of course (which I do not hold) but also Shell, HSBC and Glaxo (all of which I do hold)

Dod

[monabri]

As a drawer, as you put it, I am feeling the draft. Not just Marks of course (which I do not hold) but also Shell, HSBC and Glaxo (all of which I do hold)

Dod

It's important to a builder too.. without getting too maudlin about it, the " builder" will be looking forward to a "good dividend" in n years time and then for a further number of years. I'd suggest it is even more important for a builder that the divi increase over all these years......it also allows for an increasing fund availability for reinvestment. Would a Divi of 80p a year ( GSK ) cut it for a builder in 20/30 years from now?

[Dod101]

Somewhat off topic but that is why I think it is necessary to hold a Growth portfolio as well as a HYP. By definition a HYP is concentrating on high yield shares and often these are defensive (is this a joke?) and sometimes ex growth so I think we need to look to more growth shares as well.

Anyhow we can all breath a sigh of relief I guess with Vodafone. At least there is no cut but some very large impairment charges, cutting the assets and thus increasing the gearing ratio. That can hardly be good news.

Dod

[Arborbridge]

Thinking of "growth" - I wonder how those folk who believe in "capital harvesting" to fund their pensions. are feeling at presen? The market generally is down about 5% over a year, and certainly there must be doubt about whether that will restore itself soon. I would not like to be in the position of deciding what to sell next as I watch my income reserve being used up. No doubt some clever clogs will say they have been lucky and are harvesting ten-baggers, but in general that is probably a distant hope for the average investor.

I'd much rather watch my HYP income roll in, even if some companies are not growing dividends. Others are, of course, thus emphasising the need for a good spread of shares.

Arb.