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Vodafone stands by guidance as revenue is boosted by growth in the UK and Africa

Vodafone benefited from customer growth in the UK and Africa despite a slowdown in the telecoms giant’s key German market

  • The telecom giant’s total revenue rose 2.7% on an organic basis to €11.28 billion
  • In Germany, the company lost many cable broadband and television customers
  • Vodafone benefited from new roaming charges for UK customers traveling to the EU

Vodafone is on course to meet full-year guidance after UK and Africa trade rose significantly in the first quarter.

The telecom giant’s total revenue increased 2.7 percent on an organic basis to €11.28 billion in the three months ended June 30, compared to the same period last year.

Growth was hampered by the loss of tens of thousands of cable broadband and TV subscribers in Germany, its largest market, as a result of regulatory changes introduced in December.

Expansion: The telecom giant’s total revenue rose 2.7 percent on an organic basis to €11.28 billion in the three months ended June 30

However, this was offset by strong performance in the UK, where service revenue rose 6.5 per cent as annual subscription prices rose and added 18,000 more mobile customers and 22,000 more broadband customers.

The FTSE 100 group has also benefited from an opportunity to reintroduce new roaming charges for Britons traveling across the European Union and increased revenue from its cell tower arm.

Another strong result came from the company’s South Africa division, Vodacom, which was boosted by rising demand for insurance services and a continued rise in the number of users of the M-Pesa money transfer platform.

As a result, the Newbury-based company expects adjusted adjusted earnings of between €15 billion and €15.5 billion and adjusted free cash flow of around €5.3 billion for the current fiscal year.

Chief Executive Officer Nick Read said: “While we are not immune to the current macroeconomic challenges, we are on track to deliver full year financial results in line with our guidance.

‘Our near-term focus on our operational and portfolio priorities remains unchanged.

‘We have made good progress in stabilizing our commercial performance in Germany and we continue to actively pursue opportunities with Vantage Towers and strengthen our market positions in Europe.’

Vodafone’s results come ahead of tomorrow’s annual general meeting, where Read could face backlash over his proposed £4.1million compensation package, an increase of around £600,000 on last year.

Shareholder adviser PIRC has urged investors to vote against the proposed payout, saying it is “unacceptable” given the sharp fall in the company’s share price during his tenure.

Since the acquisition of Vittorio Colao in October 2018, Vodafone shares have fallen about a fifth while plummeting 42.6 percent over the past five years. They remained unchanged at £1.29 on Monday.

However, two other institutional advisors, ISS and Glass Lewis, have expressed support for Read’s prospective compensation package and are optimistic that an overwhelming majority of shareholders will vote in favor.

Victoria Scholar, Interactive Investor’s head of investment, said: “Long-term investors in Vodafone have had a difficult time with the stock, which has struggled since the peak in 2015.”

However, she noted that “the stock is attempting to reverse at least some of those losses, with shares outperforming the broader market since the March lows and recovering about 10 percent from the lows.”

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Vodafone stands by guidance as revenue is boosted by growth in the UK and Africa

Source link Vodafone stands by guidance as revenue is boosted by growth in the UK and Africa

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