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robleo. I am a serious expert vodafone investor, & the sp will definitely rise next week, & I am unanimous on that!! Buy,Buy, Buy. Good bye, see you tomorrow.
Good afternoon guys, I think some people can take things a bit too serious on here, it says at the top( share chat), If you want professional advice, you need to go and talk with a financial advisor , not listen to misleading advice from amateurs on here
It is a chat room, where people can give their opinions, I'm sure I don't need to tell anyone how long this has been down in the red, well for me at least, It has has gone up to 140 a few times recently then dropped back down again, you can talk this up or down as much as you like, but for me I need to physically see the share price rising, I am cautiously optimistic about it rising, but that's just my opinion, and as Dan & SIDI say, nothing anyone says on here is going to make any difference
best of luck, hope its a good week
I bought back in Friday at£1.19 thought I would off been in buying in lower on results day but quite happy with the update but I want to see more progress before I sit back and hold long term.
No dan, there were two late ordinary trades, one was at 16:29:43 @115.694p for 1,572,900 shares (buy) worth £2m+. UT of £28m was at 16:35 @126.04P and there was another big buy after the closed: 1,784,600 shares @126.096p worth £2m+ at 16:42. Both were ordinary trades. Therefore most likely were PI's trades. Usually most IIs use automatic trades.
Hello Mikey, sorry I mean sidi, you are a bit negative now days, still that's ok. I think everybody on here knows by now you can't de ramp vod with your small investment. As for the big trades the other day, I thought you said one was an UT. Uncrossing trade? Any way, me & robleo are trying to creep the s/p upwards, as opposed to the de creepers on here!? Have a good week everybody, whether positive or negative.
Hey Dan, I would be also happy to see this going back up to 131p. My last top-up was 132.74p. it will greatly reduce my losses.....lol
Dan, good evening mate, well it's gone up today after the report, not down, so sure that's obviously good, as you know I topped up recently at 118, so its nice to see that everyone is optimistic, even Mikey, cant ask for more than that ?, all this talk of bonds /undervalued/charts etc, etc, means nothing to me, unless its reflected in the share price, so if this keeps (creeping up} I will be very pleased, looking promising so far though, so fingers crossed
Have a nice weekend
sidi. Thanks for that, sounds good. ----- If we hit 131 soon, my laugh may become louder? I just hope we can keep Mikey laughing. As for skiing, I have booked for next march, so I just hope it doesn't get cancelled, just go easy on the ski slope jokes, as I can be a bit touchy sometimes!! Well according to robleo, anyway? Have a good weekend, sidi, robleo, & all. L.O.Q.
Good evening Dan. The table shows that VOD is really high in debt but has come down a little since it peaked at $89+b third quarter of last year. Now down to $84.7b. That's this year March's figures. They have redeemed £1.2b MCB few weeks ago. Therefore it has come down to a little over $83.5b now. I believe they can reduce it further in the near future with fcf €5.2b available....
Fleccy , thanks for your post, but with respect you end up with that naff saying dyor. So many on here d.y.o.r. It ends up as contradictory nonsense?! Surely you experts?! can learn from each other, then investors like me can learn from you?? Ok not quite that simple perhaps? At the end of the day,these guys who work on the b.o.d. for vod, or there accountants, brokers,are far move clever, than you,or me? Anyway, I hope you are right about vod, because I am holding on.
sidi, Thank you for your table. Totally meaningless to me? Presumably not to you though??!! L.O.Q. ( Laugh out quietly). Let's just hope for a good run up next week?
Here is a table of how does Vodafone's Total Debt benchmark against competitors?
The following companies as similar to Vodafone Group Plc because they operate in a related industry or sector. We also considered size, growth, and various financial metrics to narrow down the list to the ones listed below:
Name Total Debt
Communication Services 12.279 M
Pintec Technology Holdings Limited 81.626 M
freenet AG 1.477 B
Hellenic Telecommunications Organization S.A. 1.798 B
Millicom International Cellular S.A. 6.65 B
Koninklijke KPN N.V. 9.324 B
Rogers Communications Inc. 15.787 B
América Móvil, S.A.B. de C.V. 34.686 B
Telecom Italia S.p.A. 36.53 B
Orange S.A. 53.151 B
Telefónica, S.A. 62.936 B
Vodafone Group Plc 84.715 B
Definition of Total Debt
We can calculate total debt as follows:
Short Term Borrowings [ $1.869 B ]
(+) Current Portion of Long Term Debt [ $5.104 B ]
(+) Current Portion of Lease Liabilities [ $3.661 B ]
(+) Long Term Debt [ $62.464 B ]
(+) Long Term Lease Liabilities [ $11.617 B ]
(=) Total Debt [ $84.715 B ]
The tables below summarizes Vodafone’s Total Debt and common size over the last five years:
Fiscal Year Total Debt Assets % Assets
2017-03-31 51.757 B 165 B 31.4%
2018-03-31 56.223 B 179.4 B 31.3%
2019-03-31 64.21 B 160.2 B 40.1%
2020-03-31 89.862 B 185.3 B 48.5%
2021-03-31 84.715 B 181.8 B 46.6%
The tables below summarizes Vodafone’s Total Debt and common size over the last four quarters:
Quarter Ending Total Debt Assets % Assets
2020-06-30 85.574 B 176.3 B 48.5%
2020-09-30 89.296 B 183.9 B 48.5%
2020-12-31 88.275 B 189.4 B 46.6%
2021-03-31 84.715 B 181.8 B 46.6%
"So, if VOD is making Bond interest payments of $2 billion p.a., I'd love to know what the face value is? Based on today's interest rates, I'll guess the total is north of $40 billion. Throw in the bank debt and $15b of EBITDA means that total debts are 3 times ebitda, which is not a small multiple. Good luck."
Don't need luck, Vodafone is a sure thing in my opinion. They're just a money printing machine, and Telecoms in general will be must have investments in future portfolio's, again just my opinion, DYOR.
"Remember too that Convertible doesn't mean VOD can always repay the loan with shares. The agreement will state a conversion price. Lenders will choose to convert when the conversion price is less than the SP. That way they make their profit. If the SP is less than the conversion price as the repayment date approaches, lenders will want cash on the barrel-head, not shares."
Vodafone's recent Bonds are Hybrid securities, or MCB's (Mandatory Convertible Bonds). MCB Bondholders don't have a choice, and have to accept shares and not cash, hence the share buybacks.
https://www.lse.co.uk/rns/VOD/mandatory-convertible-bond-assocd-share-buyback-bgn8tesvf3fde4o.html
https://www.lse.co.uk/rns/VOD/conversion-price-of-mandatory-convertible-bonds-cm9v3nip151au7l.html
Umeed, you say in your 3rd para, at 18.42, that "bond holders cannot push company into bankruptcy". I'm afraid you're 100% dead wrong. Just because the bonds trade on a public market is irrelevant. Each set of bonds, whether or not convertible will have a committee of trustees, representing all the lenders. Should VOD fail either to make an interest payment when due, or a capital repayment on the repayment date, they have 30 days to cure the fault, failing which the trustees can can take whatever legal action they choose.
Furthermore, there's a very nasty little clause, known as a "cross-default clause" to be found in all corporate borrowing contracts. The wording says that even if you're up to speed with the interest payments you owe to me, should you fail to pay another lender after the 30 day grace-period expires, and you're in default with the other other lender, then you also deemed to be in default with me and I can take action against you enforce repayment of your debts to me. Very nasty.
Remember too that Convertible doesn't mean VOD can always repay the loan with shares. The agreement will state a conversion price. Lenders will choose to convert when the conversion price is less than the SP. That way they make their profit. If the SP is less than the conversion price as the repayment date approaches, lenders will want cash on the barrel-head, not shares.
So, if VOD is making Bond interest payments of $2 billion p.a., I'd love to know what the face value is? Based on today's interest rates, I'll guess the total is north of $40 billion. Throw in the bank debt and $15b of EBITDA means that total debts are 3 times ebitda, which is not a small multiple. Good luck.
danielh: I am sorry, I forget to mention that:
If Vodafone management do not hand out excess cash they have to shareholders than what they should do?
Management take huge bonuses, pay rises, paid expensive holidays and share bonuses held in treasury (after buying shares from open market into treasury)?
danielh: All loans and Bonds have redemption period and currency denomination. For same redemption period and currency denomination, bonds are always more expensive than bank loans.
There are some corporate bonds (usually convertibles) that are linked to share price and thus, have very low interest rate, but their return happens when company do good and share price rises. For instance, such bonds are redeemable in shares (plus interest) at fix buying price [like Vodafone recently redeemed MCB. MCB holders would have got same number of shares ... or at £1.2 per shares regardless of share price in market].
Advantage of bonds for companies is that, bond holders cannot push company into bankruptcy. If company does too bad and could not even pay interest on bonds, than bond price goes down ... even become worthless.
On the other hand, if company get into trouble than bank loans can push company into bankruptcy.
I do not think, Vodafone is paying too much dividend or having financial difficulty.
Think: What Vodafone should do with their huge cash flow and substantial EBITDA, other than give reasonable part of it to shareholders?
When Vodafone has declared their policy to keep debt (bank loan + corporate bonds) between 2.5 and 3 time EBITDA, then that is what they are doing. Their debt has not exceeded over 3 X EBITDA, so why worry?
If Vodafone was having cash crunch than they would not be buying shares to keep in treasury so that they can redeem convertible bonds, rather they would have issued new shares. Maybe, if there was cash crunch than Vodafone would have reduced dividend too.
Vodafone is using their cash to buy shares from open market and use that shares to redeem convertible bonds, instead of issuing new shares to redeem these bonds, shows they have no Cash crunch or having any financial trouble.
Umeed, I find your post very interesting, & if you are right, very encouraging. What worries me a bit though is, you seem to be saying that most of vod's large debt is in bonds, which you say are safe, but expensive? So in your opinion, are you saying vod is paying a high price for it's deb't, in return for safety? Many posters on here in past, have said vods % repayment on bonds is very cheap, but I think,(as you are suggesting), they are wrong. But still a wise way to raise funds. I think what worries a lot of investors, is that vod appears to borrow sometimes, just to maintain the high divi?
BeingTheBanker: To worry about company debt, you should know type of debts.
Vodafone has 3 types of debt.
1: Bank loans (it is danger debt for sick companies, could bankrupt company)
2: Corporate bonds (It is normally expensive but free of danger for company)
3: Debts in form or commitments, etc. (These debt are mostly irrelevant, as it is paid with time and is part of running cost)
Vodafone debt is mostly in form of corporate bonds. They are tradable in market. If company do bad, value of these corporate bonds go down in market. Corporate bonds cannot push company to bankruptcy. So, one should not worry about company having corporate bonds.
Bank loans: Vodafone has ~$1.5 bn bank loans (it was $3 bn last year). This debt is too small for company with over $15 bn EBITDA to worry about.
Just think: Importance of $1.5 bn debt for a company (Vodafone) that distributes ~ $1.6 bn in dividend.
So, debt is not a problem for Vodafone. If debt was problem than Vodafone would stop buying own shares to redeem debt (convertible bonds), rather, Vodafone would have issued new shares to redeem convertible bonds.
Well, Vodafone is paying ~$2 bn to corporate bond holders every year. If anyone worries about that, then one cannot stop their worries. But one should know that if Vodafone revenue decrease so much that they cannot pay dividend on corporate bonds (service bonds debt), first thing Vodafone would do is stop buying shares (to redeem convertible bonds), rather, would issue new shares to redeem convertible bonds.
Even then, if Vodafone could not service bonds, bonds price in market would go down, but bond holders cannot do much to Vodafone.
So, why worry about Vodafone debt that are mostly corporate bonds?
[That is my opinion]
I don't know why some shareholders are worried because share price has gone down, unless they want to sell and make profit.
One should remember that once Vodafone was paying 15 euro cents dividend that got reduced few years ago to 9 euro cents. One should know declared policy of Vodafone, that is, they would keep debt to between 2.5 to 3 times EBITDA. If debt reduces to 2.5 x EBITDA or less, Vodafone would increase dividend. Since revenue is increasing, it is most likely EBIDTA would increase too.
As for debt: Vodafone bank loans is ~ $ 1.5 bn and rest is mostly corporate bonds. Corporate bonds are tradeable and cannot bring company to knee. It means, Vodafone has nothing to worry about debt.
Some corporate bonds are convertible and it means Vodafone can issue new shares to redeems/retire them or buy shares from open market, keep them in treasury and redeem/retire these convertible bonds using treasury shares.
Vodafone buying shares from open market to redeem convertible bonds mean, Vodafone has no cash crunch or worries about debt. Else, instead of buying shares to redeem convertible, Vodafone has option to issue new shares to redeem convertible bonds.
In other words, every time Vodafone buy shares from market (what they are doing almost daily), Vodafone is reducing debt (as these shares would be used to retire convertible bonds)
Vodafone has over 1 billion shares in treasury, and holding these shares means, already retirement of over a billion pounds worth of debt (value of these shares).
I think, in couple of years time, Vodafone EBITDA would increase enough to resume 15 euro cents dividend (could be higher in near future). On the other hand, at present Vodafone share price, 7% dividend is secure.