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" What does it means share buyback with leverage of 2.25 to 2.75 X? "
leverage of 2.25 to 2.75 X means the debt is 2.25-2.75 larger than the annual EBITDA
debt/EBITDA = say 2.5
a measure of how well the debt is being used to create earnings ...obviously you aim for a low amount of debt creating a lot of earnings , in an ideal situation
They really need to get the ratio below 2 mid term
Div cut in half but still lashing out cash to investors through buyback funded by asset sale. 35p is the new target but may take a few years to get there.
Like the last buyback program, a long drawn out affair of sp decline as assets leave the company.
The market cap takes account of the debt.
What does it means share buyback with leverage of 2.25 to 2.75 X?
Lets say I have an average of 1.35 sterling.
" VOD is well undervalued. "
I dont see it that way in terms of asset performance ....they still have a lot of work to do to get more efficient and achieve better earnings from what they will have left ...and that is what the market cares about
I suspect the market sees some upcoming impairments in the FY Results and sees Germany still having a lot of work to do and also facing strong competition ...huge asset value on the books there, looking dodgy IMO
Egypt going through a tough time and other African nations facing tax increases as Govt debt payments rise on higher interest payments , plus currency drops against the Dollar
They are making decisions but selling Italy doesnt solve their problems, it is just one of many to deal with
IMO
Kev Row agree wholeheartedly. Mr Market was blind to the intrinsic value within VOD. The Board have now released that value for all to see with non core assets sold off, and for the benefit of shareholders. Good job. Steady climb in share price over next 12 months. Exciting times at last for VOD.
No I am not jax. I have an interest in the stock as an an insider (i.e. employee)
I am positive on Telcos, but negative on MDV - you can probably tell from my posts. I do not like the management style and I can't forgive the poor decisions made in the last decade. Best thing for Vodafone would be new board with a different style and leadership - I think we all agree on this. So thats where I am at, still think Telcos have a bright future but not the present management.
I wish they would make a dent in their borrowings. Market cap is a fraction of the debt.
"Sale of Spain + Italy = 12bn. Current market cap c20bn. Vodafone have "recovered" 60% of the current market cap from two non core areas of their business AND they state the transactions are expected to be adjusted earnings positive. VOD is well undervalued. E& knew they were buying into a good fortune storey over the next five years. "
They have turned an asset into cash. They haven't conjured 12bn out of thin air.
I think selling them off is for the best as the current management team didn't seem to have the stomach or capability to turn them around.
"Porsche, it is churlish to say that buybacks are a complete waste of money. If VOD do as they say they will & spend 4 billion buying shares this is a saving of 88 million pounds on dividend payments alone."
They'd make more putting it in a saving account
Current dividend secured for financial year ending 31st March 2024. + buybacks = uplift of 23% in money returned to shareholders. Thereafter, dividend halved which at todays share price = c5.5%.
Sale of Spain + Italy = 12bn. Current market cap c20bn. Vodafone have "recovered" 60% of the current market cap from two non core areas of their business AND they state the transactions are expected to be adjusted earnings positive. VOD is well undervalued. E& knew they were buying into a good fortune storey over the next five years.
Very impressive and all has been delivered at speed (relatively for a huge organisation). Whats not to like. I commend the Board.
Antsoldier - you benefit on shares being picked up on the open market and their overall being less shares in existence. So your shares own 5% more of the company than they once did. Also buying the shares should see an increase in the share price and theoretically should be worth more due to the buying demand and that they are worth more.
The theory is solid but I can’t really think of an example where this approach has ever given me decent gains I can see
"the buyback is to sweeten up a forthcoming drop in the dividend"
The buyback is to reduce the dividend even further! If the buyback achieves a reduction in the sharecount of 17% ( a bit optimistic given the millions of free shares the VOD management award themselves each year). Then that is a 17% cut in the amount of money allocated for dividend payout on top of the 50% cut from 2025 onwards. Making a total of 67% cut in dividend money.
Best Regards ValueS
Porsche, it is churlish to say that buybacks are a complete waste of money. If VOD do as they say they will & spend 4 billion buying shares this is a saving of 88 million pounds on dividend payments alone.
Lebara is the elephant that makes it hard for other mobile network operators to make a decent return. They don't, as far as I know, even operate in Italy, so lots of competition even without them. I think Vodafone just need to become super efficient without reducing customer service. If my experience of renewing last week at a store in the North of England is anything to go by, they have a lot to improve upon.
As a newbie to all this and shareholder with a tiny amount of VOD shares can any point me to a simple explanation or explain to me what this buyback will look like to me or how this works? what will actually happen?
Methinks the buyback is to sweeten up a forthcoming drop in the dividend , Sensible to me.
"I hope the growth materialises."
We all said that during the days of "Project Spring", remember! The days of delivering 4G then followed by 5G. And what happened, all the money from the sale of Verizone Wireless wasted and a huge mountain of dept appeared. No growth anywhere except in the dept mountain.
Best Regards ValueS
Selling physical assets to free up cash, used to reduce debt and size of equity.
Reducing dividend to reflect future free cash flow.
Focusing in value add growth markets rather than building a physical asset empire seems reasonable to me.
I hope the growth materialises.
The buybacks an utter waste of time, I guarantee you share price will be sub 60 soon, dividend is being cut in half and if they wanted to return money to long suffering shareholders do it through a special, the buybacks will vaporise half this money and the other half will disappear into the debt mountain. Another dogshxt ftse 100 company on the worst index in the world.
A total of €4 b worth of buybacks intended. €2 b after the completion of sale of Vodafone Spain and a further €2 b after Vodafone Italy, according to today's RNS. Since there are 27,078,739,427 outstanding VOD shares according to the latest voting rights RNS, then this represents a total of 14.7717 euro cents per share worth of capital return. At current fx this equals to 12.623 GBX per share. At current SP of 68.8 GBX this represents only 18.347% of mcap. And the higher the SP the lower this figure gets! Am I missing something?
Best Regards ValueS
Share buyback is a mid term benefit, if earnings growth materialises.... but they need to do it,rather than just hand the cash back to shareholders, as the cash flow now will be lower once Spain and Italy gone , and the BB will assist EPS by H2 FY25
Italy sale is cash flow dilutive
A special dividend would have been nice….hope share buyback is beneficial…it has n
been singularly unhelpful with ABDN..except for Stephen Bird’s bonus
" As at 31 March 2023, Vodafone Italy had gross assets of 12.4 billion Euro . For the 12-month period ended 31 March 2023, Vodafone Italy generated a loss before tax of Euro (49) million."
Amazing really ....that with 12.4 billion Euro of assets ( plus some debt ) it can only generate an operational loss
Great news today.
Good to hear VOD will be investing in B2B IOT networks.
Plenty of opportunities for future growth, with a rebased DIVI to keep the investor interested.
One for the longer term, not for trading