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"reed needs to be replaced by a wall street american who reacts to market fast and gets job done."
Debt has suddenly become an issue for the market, as demonstrated by recent UK Gilts fiasco, but the market builds narratives around sectors and individual companies to suit itself. If you look at the UK Telecom market, the mixed narratives highlight the manipulative nature promoted by certain media and market players.
If you look at BT, VMO2, UK Altnets, and the narratives pushed by vested interests, we're led to believe the Altnets will chip away at BT/Openreach until the company becomes a shadow of its former self. The recent ridiculously speculative story around VMO2 taking over TalkTalk highlights my point, knocking around 7/8% off BT's share price and ignoring the strength and scale of BT, but as soon as BT talks about Equinox, all of a sudden the Altnets are weak and at risk of failing because BT is wagging its tail.
I used the UK in the above example as its blatantly obvious that BT has been talked and beaten down by market vested interests, but the whole Telecom sector has been beaten down less obviously. Deutsch Telekom has outperformed others due to its T Mobile holding in the US, but that could change in a heartbeat. Chances are the whole Telekom sector narrative will change at some point, with beaten down stocks eventually outperforming.
reed needs to be replaced by a wall street american who reacts to market fast and gets job done.
Very damning article on Vodafone in the guardian, and especially damning of Read.
His tenure has been an absolute fiasco. Surely his time has come, as he will only inflict irreversible damage on this company.
Velo.. Got you sussed? You just want to buy them on the cheap? So do I, but I have run out of money! What part of buy low, sell high don't I get? Can anybody lend me a few grand?
longtimeinvestor. I hope you are right about that, the low% rate. If so then no need to cancel the divi, but if the future rate rises, then a need for caution. Cheers mate.
Vod
Posts below are a bit late (years) in condemning Net Debt.
Net Debt is hardly any different to the past 3 years!
This will make 4 years of very similar Net Debt.
Similar - not shockingly worse!
A relatively small reduction in earnings has been issued. Over €1.5billion was previously forecast.
Today that has been lowered but it's still circa €1.5billion!
Yes, down a few low hundred million. Not down a billion but a few hundred million.
Technically the wording is being regarded as a profit warning. However I have a ton of data on profit warnings and the average one day fall after such announcements is 20%+) usually more) in most cases, but the lowest comes in at circa a 15% drop. VOD has done approx a one day 8p/8% drop.
That is not a typical profit warning reaction!
Should the SP go on to drop the equivelant of 20% from Monday's close then I'd be prepared to make a special case for VOD and treat it as a proper profit warning. And that opens up a whole new can of worms. And that's another subject (post is long enough :) it
Been on the motorway all day so tired now after studying the past 3 years almost identical net debt so not posting them but will wait to see if the next 2 years estimates (by analysts) of fantastic Net Profits get adjusted down and will post those soon (couple of weeks)
But at the moment the huge net profits forecast for the next 2 years are still the same.
Probably will come down a bit, but not much by the sound of things; because -
Revenue is up for H1
So is Operating Profit.
However Net Profit is a little down on last year. Just a little only, though.
But Net Debt is approx over €1b higher. When you're talking about the past 3 years being in the lower end €40b's then €44b last year/€45b this H1, which is still in the lower 40's, is hardly the end of the world is it?
Key is how the SP reacts in the coming days. Needs to drop at least another 8p yet again (and then some; that's the bare minimum required) to become a more serious concern before it can be regarded as a propa' pannicky profit warning.
Haven't worked out a floor yet (tired)
(And need to see analysts new 2 year replacement forecasts based on today's news) so please keep the bearish posts coming so I can consider getting a bargain-priced small tranche in the margin of safety category :)
Cheers Rob & thanks for replying. For me today has been a disaster, so nice to have friendly reply. I think I will just hold. It is all about debt. The old saying was,income £1.10p outgoings £1. bliss. Income £1. outgoings £1.10 misery. It is a fine line, even more so when you are highly geared as vodafone is. Whoever had been C.E.O. of vod over the last 5 years, I think the result would be the same. There is no point moaning about his high salary, if you had paid someone less, it would probably have been even worse. Lets face it, it will take a very clever C.E.O. to get us out of this mess,& I for one will be happy to pay a big salary if he/she can do it. The trouble is nobody will take the job unless you pay them a big salary up front. I wouldn't of course , because I would not have a clue, the same as everyone else, on this know it all forum.
Hello Porsche1946
Welcome back and any possibility of a reply to my question a month or so ago please?
Cheers
dan
'' I have tried many times to find out what % interest vod pays on its debt''
Whatever it is I believe that I read that it was fixed ,suggesting therefore it could be fairly low considering we have had ultra low interest rates for many years.
Dan, yes it has been rubbish mate, let's be honest about it and another five years from now it may still be rubbish, the question is what to do about it other than moan, selling up is not an option at these prices, had my finger on the buy button today but held off, thinking it may drop further after exdiv will see what happens tomorrow
best of luck mate
Robleo. Well I blame you(only joking) & the covid pandemic, massive competition in the mobile market, the Russian war, & all manner of unforeseen events, Just open your mind, & stop being so blinkered. But of course vod has been a disaster, so lets accept that & move on. Would a new C.E.O. fare any better? Rob, be honest, you don't know the answer to that any more than I do, but come on amigo, you are far to clever to do this knee jerk, sack Nick Read nonsense surely?
Low SP good for 6M shares bought back today
L.T.I. G59 gets a little stroppy at times. I have got used to it, so don't take in personally. He is normally very pleasant?
well, if you can't blame the ceo and board of directors for the rubbish performance of this company over the last 5 years, then who can you blame? surely that's what they get paid mega salary and bonuses for, just look at the charts since nick reed took over
A very valid question. The answer is can you make more % profit than you pay on your debt. If yes then don't pay off debt, if no then you should pay off debt. I don't have the answer because I don't have a crystal ball. I have tried many times to find out what % interest vod pays on its debt, but I gather it is quite complex. I think long term holders of vod as I am, tend to favour keeping a good divi, as in time you will do very well. Many posters on here say they buy vod for its high divi yield, so I assume they would be dead against cancelling the divi. It is not black or white in my opinion. Lets all face it, vod has been a disaster as an investment lately, but it is the future that matters, as the caveat says,past performance is no guide to the future.
G59
''LTI - No one, not one single person in the whole wild world is interested or cares that you have just brought VOD @ 96p.''
Well that is wrong isn't it - you are interested and their maybe someone else.
You really should learn not to speak on behalf of every person on the planet.
Tempted to buy in this morning, but I feel it may have further to drop. A lot of PI’s seem to have a fixation with debt, remember debt is cheaper than equity, it is what they do with it that matters. It is only a problem when the debt cannot be serviced and we are nowhere near that. That said I would love to see this hit sub 90p.
just when you think things will never get better
they suddenly get worse!!.
Mikey says on the vodafone share forum. "now we could be in trouble-Russia hitting Poland with a missile killing 2 people". You could not make this guy up. Is he trying to be funny? Wrong forum Mikey. Try the war in the Ukraine/world war 3, thousands of people killed debate forum. Give us a break?. But at least he is not blaming Nick Read?
Vod don't need to raise capital, just cancel the dividend for a couple of years. They are trying to please everyone by borrowing from Peter (more debt) to Pay Paul (dividends to shareholders)... €45 billion debt is just too much Imho! It ain't rocket science is it?...
So Moniman, short of selling even more assets to try and pay down its debts (the circle of death) what would be your solution? VOD operates in competitive markets and has limited scope to either increase prices and/or gain additional market share (without even further investment). Simply moving the chairs around on the Titanic wouldn't have saved it! It would seem that the only realistic soultion would be for VOD to now undertake a sizeable capital raise (at least £10bn) to try and break the back of its debt mountain (put simply, VOD returned too much capital to shareholders in the past and should have retained more to pay down its debt).
A lot of rubbish being talked here about debt. All successful companies carry huge debt, it is par for the course. I am more interested in profit, the future and a good dividend. All 3 of these points look good to me with a divi around 7%. The pensions institutions will be loading up here within the next 10 days. Short this at your peril.
Mikey, a nuclear war would wipe out all subscribers, not just Vod subscribers.
I imagine communication infrastructure would be afforded a certain level of protection and I am sure core physical infrastructure can withstand significant bombardment.
As Del boy commented on 'the russians are coming' and building a nuclear bomb shelter....'The end of the world could be just the break we’re looking for! Oh we’re pretty shrewd Rodney. '
Now we could be in trouble - Russia hitting Poland with a missile killing 2 people