understanding Morningstar cash flow

[Arborbridge]

Code: Select all

Cash Flow         
                   
Cash Flow Per Share |  0.28 |  0.48 |  0.54 |  0.51 |  0.49
CAPEX PS            | -0.31 | -0.38 | -0.52 | -0.32 | -0.29


Above is a cash flow by year (2018 on the right), as it happens for VOD. Can anyone explain whether the cash flow per share given has already taken into account the Capex, or must one subtract one from the other to obtain free cash?

I've looked around for guidance on the Morningstar via the glossary, and it seems to me that one must subtract the CAPEX from the cash flow, but there is room for doubt.

Does anyone have a definitive answer?

Arb.

[IanTHughes]

Code: Select all

Cash Flow         
                   
Cash Flow Per Share |  0.28 |  0.48 |  0.54 |  0.51 |  0.49
CAPEX PS            | -0.31 | -0.38 | -0.52 | -0.32 | -0.29


Above is a cash flow by year (2018 on the right), as it happens for VOD. Can anyone explain whether the cash flow per share given has already taken into account the Capex, or must one subtract one from the other to obtain free cash?

I've looked around for guidance on the Morningstar via the glossary, and it seems to me that one must subtract the CAPEX from the cash flow, but there is room for doubt.

Does anyone have a definitive answer?

Can't claim to have a definitive answer, you should maybe ask Morningstar? But I can tell you that normally Free Cash Flow is labelled as such, not just Cash Flow. Also it would appear odd to me to display a Free Cash Flow, that by definition already includes Capital Expenditure, along with the Capital Expense figure that is already included, and without the simple Cash Flow figure. Finally, Free Cash Flow per share of 0.49 looks overly optimistic, but please note I have not calculated any figures myself.

Edit:

Look what I found on Stockopedia

https://www.stockopedia.com/share-price ... e-LON:VOD/

Year End 31st Mar  |  2013 |   2014 |  2015 |  2016 | 2017 | 2018
Op. Cashflow ps €  |   0.4 |   0.28 |  0.48 |  0.54 | 0.51 | 0.49
Capex ps €         |  0.35 |    0.3 |  0.38 |  0.52 | 0.32 | 0.29
Free Cashflow ps € | 0.051 | -0.022 | 0.095 | 0.017 | 0.19 |  0.2

Ian

[Arborbridge]

Code: Select all

Cash Flow         
                   
Cash Flow Per Share |  0.28 |  0.48 |  0.54 |  0.51 |  0.49
CAPEX PS            | -0.31 | -0.38 | -0.52 | -0.32 | -0.29


Above is a cash flow by year (2018 on the right), as it happens for VOD. Can anyone explain whether the cash flow per share given has already taken into account the Capex, or must one subtract one from the other to obtain free cash?

I've looked around for guidance on the Morningstar via the glossary, and it seems to me that one must subtract the CAPEX from the cash flow, but there is room for doubt.

Does anyone have a definitive answer?

Can't claim to have a definitive answer, you should maybe ask Morningstar? But I can tell you that normally Free Cash Flow is labelled as such, not just Cash Flow. Also it would appear odd to me to display a Free Cash Flow, that by definition already includes Capital Expenditure, along with the Capital Expense figure that is already included, and without the simple Cash Flow figure. Finally, Free Cash Flow per share of 0.49 looks overly optimistic, but please note I have not calculated any figures myself.

Edit:

Look what I found on Stockopedia

https://www.stockopedia.com/share-price ... e-LON:VOD/

Year End 31st Mar  |  2013 |   2014 |  2015 |  2016 | 2017 | 2018
Op. Cashflow ps €  |   0.4 |   0.28 |  0.48 |  0.54 | 0.51 | 0.49
Capex ps €         |  0.35 |    0.3 |  0.38 |  0.52 | 0.32 | 0.29
Free Cashflow ps € | 0.051 | -0.022 | 0.095 | 0.017 | 0.19 |  0.2

Ian

Thank you Ian, have a rec, as we used to say! That seems pretty conclusive and confirms my gut feeling that one must subtract one from the other to get FCF. That's most helpful. I didn't email Morningstar because I knew that would take much longer than asking here
I think subconciously I picked VOD due to its dire eps cover, but remembered someone (TJH, I think) pointing out that the cash cover wasn't nearly so bad. Well it's not good, but at least it has been covered for the latest two years with dps being:

Code: Select all

Dividends                                   
        2014    2015    2016    2017    2018
DPS c  | 0.23 | 0.14 | 0.16 | 0.14 | 0.15


[code]


Arb.

[IanTHughes]

Year End 31st Mar  |  2013 |   2014 |  2015 |  2016 | 2017 | 2018
Op. Cashflow ps €  |   0.4 |   0.28 |  0.48 |  0.54 | 0.51 | 0.49
Capex ps €         |  0.35 |    0.3 |  0.38 |  0.52 | 0.32 | 0.29
Free Cashflow ps € | 0.051 | -0.022 | 0.095 | 0.017 | 0.19 |  0.2

Thank you Ian, have a rec, as we used to say! That seems pretty conclusive and confirms my gut feeling that one must subtract one from the other to get FCF. That's most helpful. I didn't email Morningstar because I knew that would take much longer than asking here
I think subconciously I picked VOD due to its dire eps cover, but remembered someone (TJH, I think) pointing out that the cash cover wasn't nearly so bad. Well it's not good, but at least it has been covered for the latest two years with dps being:

Code: Select all

Dividends                                   
        2014    2015    2016    2017    2018
DPS c  | 0.23 | 0.14 | 0.16 | 0.14 | 0.15


Also note that Free Cash Flow has been improving and the board has re-iterated its determination to increase the pay out year on year. As a result, my last two monthly top-ups have been Vodafone Group (VOD) - on 11 Feb the price paid was 139.6778 while on 11 Mar the price paid was 137.5733. Since then the price has recovered somewhat to 144.26 but, right now, a further similar sized top-up is on the cards for 10 April. I cannot see into the future, but the VOD dividend looks sustainable to me.


Ian

[Arborbridge]

Also note that Free Cash Flow has been improving and the board has re-iterated its determination to increase the pay out year on year. As a result, my last two monthly top-ups have been Vodafone Group (VOD) - on 11 Feb the price paid was 139.6778 while on 11 Mar the price paid was 137.5733. Since then the price has recovered somewhat to 144.26 but, right now, a further similar sized top-up is on the cards for 10 April. I cannot see into the future, but the VOD dividend looks sustainable to me.


Ian

I've been backing off a little from VOD, but seeing the cash flow, like you perhaps now is the time to forgive.

Debt is still pretty high and increasing slowly.