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2nd higher low just punched in on the 5 min.
"The company, formerly known as Etisalat, confirmed it had no intention to make an offer for Vodafone. However, it said it reserves the right to do so in line with UK takeover rules."
Sounds a bit like... "The manager has the boards full support" at the post match media conference
Bid coming perhaps, what price woukd be accepted though?
Any takeover would be close to the current asset price. At least 160p, maybe more?
The assets would be needed to cover debt. Business is probably worth around 90-95p.
The book value of a stock is theoretically the amount of money that would be paid to shareholders if the company was liquidated and paid off all of its liabilities. As a result, the book value equals the difference between a company's total assets and total liabilities. Current Book Value/Shr = 166p—173p.
'Current Book Value/Shr = 166p—173p'
Theres been enough valuation work to support at least the book value so auditors etc wont be pushing for any write downs. The debt maturity profile is 11+ years and no short term liquidity issues.
So the SP is more to do with the quality of the investors/ stockholders and less to do with Vod assets etc.
Todays RNS is positive imho. Not for the faint hearted though
'The book value of a stock is theoretically the amount of money that would be paid to shareholders if the company was liquidated and paid off all of its liabilities. As a result, the book value equals the difference between a company's total assets and total liabilities. Current Book Value/Shr = 166p—173p.'
A common misunderstanding from investors looking for value.
If a company did close and pay off it's debts, it could only do it with real things, so all the goodwill and intangibles should not be considered. Cautious value investors looking for true value will look at net book. VOD's net book is €0.13 per share. It's a goodwill giant.
It's why buffet isn't here buying for pennies on the dollar, because it isn't. VOD can't wind down and pay back investors, so don't consider it a get out.
So by that logic, you'd expect them to hold 50 billion in cash "tangible" before you'd invest?
You special tnuc
another common mistake is to lose sight of the Brand when thinking about Goodwill. Brand is valued at $19.51Bn. EIA I am certain will be interested in the Brand which sits well with the Africa partner markets model. How it all gets sliced and diced is beyond me but I am sure EIA and Niel know exactly what they want and now 13.5% of the stock.
https://www.statista.com/statistics/500110/vodafone-telecom-brand-value/#:~:text=Vodafone%E2%80%99s%20brand%20value%20fell%20by%20slightly%20more%20than,billion%20U.S.%20dollars%20to%2021.83%20billion%20U.S.%20dollars.
"If a company did close and pay off it's debts, it could only do it with real things, so all the goodwill and intangibles should not be considered. Cautious value investors looking for true value will look at net book. VOD's net book is €0.13 per share. It's a goodwill giant."
More b0ll0x. Honestly, I don't know about the profanity filter on here, they should also add a talking 5h1te filter too. How do you figure €0.13 per share?
With 28,818,256,058 issued shares and your valuation of €0.13 per share, that would value all of Vodafone's assets at just €3.746 Billion, so all of Vodafone's UK and Worldwide assets. If you're going to post a figure like that, you should back it up with calculations listing the relevant asset values. If you read it somewhere, it's pure fantasy.
Vodafone's Net Book value, stated in the 2022 Annual report came in at €53.244 Billion, which is approximately €1.84 per share.
Those towers are well over priced lol
Just to add, the Goodwill portion of the Net Book valuation is €31.884 and the definition of "Goodwill":
"Goodwill arises when a company acquires another entire business. The amount of goodwill is the cost to purchase the business minus the fair market value of the tangible assets, the intangible assets that can be identified, and the liabilities obtained in the purchase."
So, Goodwill is important when assessing the value of a company and is part of the Net Book value.
"Just to add, the Goodwill portion of the Net Book valuation is €31.884 and the definition of "Goodwill":"
That should read €31.884 Billion, now you've got me making stuff up too, lol.
I am a customer and so fear not.
Also, be thankful not to be DDDD or JOUL investors.
Hi Fleccy
LSE site defaults to the true meaning of net book so I took the figure from the fundamentals tab. You can see it at the bottom.
I did not bother to download the vod accounts yet again to check the figure there, but am sure it is correct from the last time I did it.
"LSE site defaults to the true meaning of net book so I took the figure from the fundamentals tab. You can see it at the bottom"
I'm not sure where they get their NAVPS of €0.13 from, but using their figures of:
Net Assets 56.977 Billion
Shares in Issue 27.410 Billion
56.977/27.410 = €2.078 Per Share
They probably need to look at the formula in their spreadsheet, since I get a NAVPS of €2.078 using their figures.
Book value includes goodwill and intangibles, whereas net book value doesn't.
Subtract the intangibles from the shareholder equity and divide by the shares in issue and that's where the 0.13 NAVPS (it's actually 0.136)
"Subtract the intangibles from the shareholder equity and divide by the shares in issue and that's where the 0.13 NAVPS (it's actually 0.136)"
But it's wrong, you can't subtract goodwill from the Net assets since it undervalues said assets and gives an incorrect valuation of the company. If you strip out goodwill, in the case of a Telecom company, then the figure is meaningless. Dividing Net Assets by shares in issue gives a more correct valuation per share of the assets.
You can use either book value or net book value to base your investment decisions on - I was just explaining the different terms and how they are calculated :)
"You can use either book value or net book value to base your investment decisions on - I was just explaining the different terms and how they are calculated :)"
Isn't the Net Asset value of €56.977 Billion with intangibles taken out anyway?
If you strip out Goodwill, then it doesn't reflect the value paid for the assets or the earnings potential of the assets. Strip out Goodwill and it's like saying the Mona Lisa is only worth the price of the frame and you may as well throw away the canvas. Valuing NAVPS at €0.13 is like shredding the earnings and only assigning value to the nuts and bolts, I wonder what Banksy would say about that lol.
"Strip out Goodwill and it's like saying the Mona Lisa is only worth the price of the frame and you may as well throw away the canvas. "
--
lololol cracked me up and spot on mate.
No company share price reflect NBV today in the market, IMO. Further, accounting numbers are artificially manipulated.
The canvas of the mona lisa is a thing and has a value, as with the frame. The goodwill is how much extra you will pay for the painting. The purchase price minus the canvas and the frame.
That goodwill you can see has a value. A good chance to resell the painting and get it back. VOD's goodwill however, who really knows what it contains. As a shareholder you can ring VOD IR and ask them, but I doubt they will tell you. You can only guess it has some resale value, or is it all vapour linked to past purchases gone bad. Have they written everything off from India yet? will the new CEO kitchen sink with a goodwill write-down?
It is safer to do your calculations excluding goodwill, and intangibles, that you have no idea if they even exist.
"VOD's goodwill however, who really knows what it contains. As a shareholder you can ring VOD IR and ask them, but I doubt they will tell you. "
The reasoning behind Goodwill is all laid out in the Annual reports; You don't need to ring the company, just read the annual reports.
"Accounting policies
Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future economic benefits attributed to the asset will flow to the Group and the cost of the asset can be reliably measured. Identifiable intangible assets are recognised at fair value when the Group completes a business combination. The determination of the fair values of the separately identified intangibles, is based, to a considerable extent, on management’s judgement.
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition.
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill is not subject to amortisation but is tested for impairment annually or whenever there is evidence that it may be impaired. Goodwill is denominated in the currency of the acquired entity and revalued to the closing exchange rate at each reporting period date. Negative goodwill arising on an acquisition is recognised directly in the income statement.
On disposal of a subsidiary or a joint arrangement, the attributable amount of goodwill is included in the determination of the profit or loss recognised in the income statement on disposal. Finite lived intangible assets Intangible assets with finite lives are stated at acquisition or development cost, less accumulated amortisation. The amortisation period and method is reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
Licence and spectrum fees
Amortisation periods for licence and spectrum fees are determined primarily by reference to the unexpired licence period, the conditions for licence renewal and whether licences are dependent on specific technologies.
Amortisation is charged to the income statement on a straightline basis over the estimated useful livesfrom the commencement of related network services.