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its interesting that c.25% of VODs debt is not due until 2030 to 2040 and another 25% not due until after 2041. So +50% in the next economic cycle. And when you look at the coupon on that debt, alot of it under 2%. There is very little due in the next couple of years.
In the meantime they are still guiding €5.3Bn FCF with +2% service revenue growth, inflation indexing built in and the dividend looks safe for FY23 and beyond imo.
Happy to take the dividend while the screw turns on the asset valuations/ sum of the parts and europe and africa are growing. When country gdps recover, VOD recovers without increasing fixed/ capital costs imo. Also network cost initiatives like the vantage sale offer the prospect of paying for what VOD uses rather every room in the hotel, occupied and unoccupied (depending on % investment they sell). Maybe we get a special dividend for all the pain of the last 5 years whilst losing a couple of €Bn vantage debt off the balance sheet. Hooraah! NOV 15 cant come soon enough
https://investors.vodafone.com/debt-investors/financing-strategy
https://investors.vodafone.com/debt-investors/bonds-outstanding-eu-and-us
This is truly a dog of a share. I have held for many years as an income generator in my SIPP DD account, but it seems to plumb greater and greater depths. The 3yr chart looks like a ski jump ramp. I know VOD has/had a lot of debt but can no one turn this around - was once the UKs greatest company...
Meant to say below 200, 2 years ago
Why was BP down below 2 years ago? Same irrational reasons apply to telco.
Thanks both... I've halved mine. Was too big. But I'll keep it for the divi and the hope of +ive corporate activity.
VOD is low as interest rates are rising. As a long term investor you need to understand the relationship between interest rates and stock valuations.
Beyond that VOD has it’s own issues focused on it’s balance sheet and the possibility of falling margins. Costs are up, but are sales prices up by same amount? Given that they are giving freebies to attract customers, probably not.
Margins have become the main focus of investors.
Q asked by COP - Is VOD’s dividend well covered?
I think at the last count cover was 1.67, below the standard 2.0 but as we know VOD is a cash machine & the thinking is that dividends will grow ever so slightly in 2023 & 2024.
Let’s not forget that the board were confident enough to sanction a two billion euro buyback not so long ago so the lads & lasses on the BOD must be confident of the numbers in the short term, by that I mean up to 2025..
I’m expecting a no change in the divi announcement soon so a yield of 7.68% at the current SP as I type. G’s finger is hovering over the buy button.
https://www.telecomtv.com/content/open-ran/samsung-lands-more-open-ran-business-with-vodafone-45769/
Is the dividend well covered? Looks like there is lots of potential to bring out value and management is under pressure to do so.. relatively defensive and geographically diversified for current environment? Why is Vods so low? Am I missing something?
at I would guess a fairly chunky loss,
does this bode well..?
An activist fund is one which supposedly sees value
when other may not..
And now, if reports are accurate, they have taken a large dump.
Well I could add some - then it would fall!
I think it's being held at this level somewhat artificially but that'll only last another couple of weeks - like back in August. Then another leg down.
To let you know that the recent fall has proved irresistible and I bought at an average of £1 a share last Monday. Relieved it has not fallen significantly since.
I have just heard that a potential replacement for Nick Read has recently become available, previous experience at Shell and a stint in no. 10 :)
I'm reluctantly flaunting the copyright rules but here is the first half of the article:-
Europe’s largest activist investor Cevian Capital has slashed its stake in Vodafone as scepticism grows that the UK-based telecoms group will be able to reverse its sluggish performance amid a challenging economic backdrop.
Cevian built a significant but undisclosed position in the FTSE 100 group last year through shares and derivatives, becoming one of the 10 largest shareholders according to people familiar with the matter. It was pushing for management to simplify the group’s sprawling international portfolio and sell poorly performing divisions.
However the activist investor sold the vast majority of its stake by the end of June, the people said, due to changes in the economic environment including indications that interest rates would rise, reducing the chances Vodafone would be able to secure favourable deals.
Vodafone has shed nearly 25 per cent of its value since then.
The group is looking at a series of deals across Europe but other investors have expressed impatience over the pace of change and prospects of its flagging share price being revived.
“Would management change be taken well? I think it would,” said one top 15 investor adding that chief executive Nick Read, who joined Vodafone in 2001 and took the top job in 2018, has “been there for a long time?.?.?.?and he has not transformed the business”.
Peter Schoenfeld, another shareholder and founder of New York-based hedge fund PSAM, said investors are “frustrated and fed up with Vodafone’s poor stock performance” and that “it’s very much a show me kind of situation now”.
“Read has committed to a strategy that he has so far failed to fulfil,” he added.
Short positions in the company — used by investors to bet that the share price will go down — peaked in May, with 10 per cent of the stock out on loan, according to S&P Global Market Intelligence. This has since dropped below 2 per cent.
But others are still betting the stock will rise. French telecoms billionaire Xavier Niel has built a 2.5 per cent stake in the group and is angling for a shake up.
Recent activity suggests Read is making good on his ambition to pursue deals. In August, Vodafone agreed to sell its Hungarian business for $1.8bn and earlier this month confirmed it was in advanced talks with CK Hutchison, owner of Three, to combine their UK businesses and create the biggest mobile operator in Britain. It also announced a deal to buy MasMovil’s telecoms assets in Portugal, and hired bankers to help look at selling its broadband business in Spain.
The article continues....
Slightly concerning article in the FT 15th Oct (I've been away for over a week so apologies if this has been highlighted already) - its shows that I am not alone in questionning Read's record in VOD and their appartent lack of speed in transformation of the business! There are some on this board who won't have a bad word said against him but we are getting to a point where he's had enough time to implement the change and debt reduction needed.
https://www.ft.com/content/4be57a17-216f-43b0-b616-c972266f39bc
My apologies for not answering more quickly, family drama thankfully now sorted.
Why did I sell after holding for so long?
I held until I had reached a profit which for me was in the 1.30's, but I miss being a VOD shareholder so I keep looking here. For me telecom companies are now more like utilities, they have stable cash flows yes but they are unable to manage their debt piles as unlike the other utilities such as water, gas etc they have to strip out their networks and deploy the newer technology every five years. They also have to deal with grasping governments increasing licence fees. These costs are enormous & the debt pile is where it is due in part to this.
For me the profits are just not here so I sold but if this is treated & thought of simply as a utility then fine.
It's dog eat dog. Vodafone had a really excellent deal for home broadband recently (£20 a month plus £80 gift card), and my existing provider matched it at the end of my contract after I contacted them that I could save money by switching.
That all sounds lovely does that, what a lovely story, i have been reading some other as well, a little different to yours, but i like yours best, i hope your right
UK equities are in for a sharp rally under Sunak and Hunt.
Powerful ties and links with the city.
Super hard worker and intelligent who will build strong ties globally.
End to the war is close and Sunak in combination with Modi will help achieve this IMO.
Be careful shorting UK equities.
so, they are giving the service away for free now, that should help with the debt?
28th Oct closing SP
Doyen Dan ????
Vodger 98.8p
Fredrubble 96.69p
Newsid 104.7p
Gary59 103.4p
Atb
Will do another list tomorw , all prophecy are noted..
98.8p for me please