- 2023 crunch year for CEO Nick Read
- Dividend flat at €0.09 per share
- Growth remains
Telco major Vodafone (VOD) reported underlying profits and cashflow in line with expectations for the year to 31 March 2022 but said both could be lower in the coming year due to inflation.
The FTSE 100 company reported underlying EBITDA (earnings before interest, tax, depreciation and amortisation), excluding business leases, up 5% to €15.2 billion on revenue up 4% to €45.6 billion. Adjusted free cash flow improved to €5.4 billion, just ahead of ‘at least €5.3 billion’ guidance, while net debt stood at €41.6 billion.
The dividend was flat at €0.09 per share.
So far, so dull, especially given guidance for flat to down EBITDA this year to around €15 billion to €15.5 billion, with adjusted free cash flow of €5.3 billion.
Vodafone shares barely moved, inching just 0.02% ahead to 1200.36p, or down 45% over the past five years.
M&A TO AWAKEN DROWSY GROWTH
Investors are hoping that M&A (mergers and acquisitions) might spice things up a bit. ‘The bigger UK picture is, of course, M&A, with the company now linked to both Three UK (the only practicable UK mobile consolidation option in our view - which might help Vodafone UK’s soggy margins) and TalkTalk,’ said Megabuyte analyst Philip Carse.
Vodafone also confirmed that M&A opportunities are being assessed in all of its key European markets too (Spain, Portugal, Italy).
With activist shareholder Cevian Capital putting pressure on the board to step up the pace of change, and this week a new largest shareholder, after Emirates Telecoms bought a 9.8% stake, fiscal 2023 feels increasingly like crunch time for Vodafone chief executive Nick Read.
