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Just to add, I also ignored stamp duty.
poker it was just a back of a *** packet calculation, based on the dividend rebasing to 4.5 eurocent and buying back €4 billion worth of shares at around 70p (82 eurocent); it also assumes that vodafone wont increase the dividend. of course there are variables that i ignored, like the share price increasing and reducing the number of shares purchased.
€4 billion/0.82= 4.878 billion shares purchased/cancelled
4.88 billion x 0.045 eurocent = €219.512 million
Pc
''the div bill is normally determined by the dividend policy regarding % of earnings ''
9 cents as a percentage of earnings? would have been at 9 cents for 5 years
Money allocated to dividends will be presented on a per share basis.
Reducing the share count will allow the per share basis to be increased if that is what is decided or monies saved on the reduced share count could be redirected toward debt reduction or investment - time will tell (post 2025).
" and reduce the overall dividend bill "
fleccy,
the div bill is normally determined by the dividend policy regarding % of earnings .....the number of shares just determines how much of that bill each share is apportioned ....merely give each share a bit more from a smaller earnings pool as a result of (negative )lower fcf earnings/ (positive) fewer share combination
lower div payments than before but that is due to the initial lower cash flow in the first place , so not a saving as such
Flec
Yes, an excellent return on investment. Shareholders of course will also win with asset value increases if shares were having to be bought back at a higher level
Buybacks should increase Earnings Per Share and reduce the overall dividend bill; If the share price stayed around current levels over the buyback periods, which I doubt, then Vodafone could probably buy back around 4.9 Billion shares, saving a further €220 Million per year in dividend pay outs upon completion.
Not forgetting the 9 cents per year from past years of course - hope you did so at low priced levels
T
''if you want to use your dividend money to buy more shares that is you choice.''
Yes you can buy more with your 9 cents per share dividend in 2024 and every other following years that dividends are paid
Resistance at 70p gone now. 80p by nextt friday
Personally I would rather see the money used for dividends or debt reduction than Buybacks, if you want to use your dividend money to buy more shares that is you choice.
Going off the data €5.504555 Billion is already past Next Call/Maturity date, but still showing on the Vodafone Bond debt page. I suspect the debt up to the 30th Jan has already gone but wont disappear off the page until Final Results in May.
" If they pay down the debt as it matures, without refinancing, they could reduce their Bond debt significantly over the next two years."
Fleccy
I suspect they may back some early .....their aim is for a net debt/net EBITDA ratio of 1.8 from the remaining assets
So worth around €1.5b extra taking into account there may be a reduction. I don't think its been mentioned before today
" Not sure why this has not been included in the original announcement "
jestah
it is in the RNS announcement
''Not sure why this has not been included in the original announcement''
It has been reported - I knew about it early this morning.
350 million to Vodafone for first year but may reduce after.
Interesting addendum on Italy sale with the annual maintenance charge of €350m for 5 years (minimum). Not sure why this has not been included in the original announcement - I can see this run and run as mergers at this level are incredibly long winded.
I was just thinking that.
I've decided the US opening will propel the SP beyond 70p.
Just have to sit back and watch now.
"Debt levels are very manageable at relatively low rates, and the option to reduce the debt levels as they have been doing already is there to do if a benefit."
They've got a fair amount of Bond debt maturing, or Hybrid Bonds with Next Call dates, due over the next couple of years.
https://docs.google.com/spreadsheets/d/e/2PACX-1vRA1ndHTf_Bz7O_moDxmcbWnEtcusZucUu6lEJvm3O4mGooeH4ErFjRqot3RQHBaVXCgoUED1k2CUVK/pubchart?oid=17624073&format=interactive
https://docs.google.com/spreadsheets/d/e/2PACX-1vRA1ndHTf_Bz7O_moDxmcbWnEtcusZucUu6lEJvm3O4mGooeH4ErFjRqot3RQHBaVXCgoUED1k2CUVK/pubchart?oid=1681133451&format=interactive
If they pay down the debt as it matures, without refinancing, they could reduce their Bond debt significantly over the next two years.
Is America going to do the usual on the share price - i hope not
Selling non performing assets is a plus.
simplifying the business, with concentration on profit making areas is a plus.
Merger with 'three' is a plus.
Buybacks are a plus.
Halving the dividend is a plus.
Debt levels are very manageable at relatively low rates, and the option to reduce the debt levels as they have been doing already is there to do if a benefit.
?
speculation
Knot much moaning todaye I is finking
I don't have a short, I sold my position at 71.5. You can scroll down and see me say this at the time. I would not short it as there is a small perpetual chance of takeover.
I have no regrets about selling - if it goes back to 80s or 90s I have stock options I haven't exercised. if share price end up at £1 or £2 we are both winners.
My problem is the skill of current management. I maintain that success in Spain or Italy requires the same mindset as success in Germany or UK. They are selling core business as they don't know how to turn it around, so why should the market trust them?
Feel free to disagree if you think that MDV and the board are capable - everyone is entitled to opinion.
Flec
''I thought they said the Capital Allocation review would take place in May? ''
Yes - they were so excited, that they have slipped it out early - saves specialisation for a couple of months - the split in allocation is what I was anticipating. I am guessing that buybacks would continue beyond the 4 Billion already announced if that was still the best option at the time, re pricing
Share price rising by the amount of the confirmed final dividend ..pricing it in ...
Beo1
div cut of 50% also because they tend to save cash to invest in the business rather than hand it to shareholders ..investing part of earnings as CAPEX rather than borrowing I suspect
so..really looks like the debt drunk is finally putting down the debt bottle , and deciding to get healthy !!!