Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Robina you must have read my mind as I was thinking the same thing comparing Vod's debt pile to the UK financial situation with the £2 trillion debt....Basically the previous BODs and UK Governments have run their debts all the way to the ceiling, this unfortunately hamstrings any successors room to manouver. Unlike the UK Hoverment than can raise additional taxes to pay down debt, VOD on not is the same position to do so, hence the €45 billion, debt is going to be a giant anchor dragging on the company for eternity it would appear? Aimho ADYOR. GLALTH's
Like Adidas saw last week.
N. Read your time is up.
95.69 for me this Friday, apologies for late entry.
Even if Reed was sacked it is difficult to see what could be done now to change the company into a growing profit making entity. It's like a sub-model of the UK economy with its £2+ trillion debt, increasing benefit support demands and already maxed-out scope for tax income. The market doesn't like either.
agreed
Okay €45 billion, that's going to be a permanent anchor around the neck of the BOD...not sure what terms the debt is on but that's one he'll of a mortgage on the company, especially in today economic environment? I'll pass on this one I think...the dividend just isn't big enough to justify the ongoing debt risk imho. Good luck to those holding.
High inflation is the best way to erode the true value of debt hence why the debt pile is not seen as a problem.
As they say buy when there is blood on the streets as with VOD today. Profits up and paying a 7% divi……..who ever thought you would pick this up below £1.
The divi hunters will be piling back in tomorrow.
Good luck one and all. .
Moniman, there lies the question & its a debt in euros not pounds so a little less than 45 billion quid.
IMO treat Vodafone simply as a dividend paying utility company because that's what it really is. There won't be too much growth in the share price whilst the debt is there & there is a very good chance the SP will decline from here especially if the dividend is cut which is becoming more likely every day.
Just a naive question as someone who's looked at this stock for a long time for its potential dividend yield. How on earth is Vod going to pay down a debt of £45 billion, that is almost double the valuation of the company...Competition is getting greater, personal finances are being squeezed and costs are rising? Unfortunately the dividend has also been diminishing, so how is the company going to grow itsway out of its massive debt headache?
If that’s the case Robina - I will buy in chunks every sub -10% until it exceeds £1 mark and beyond - and hold on - until recovery whether that be 3 years time or 10+ years time. Only way this fails is as Fleccy says it stops divis and start selling assets and reducing debt etc. As many firms are in the cost cutting exercise and saving mode to try combat all this inflation/high interest and economical factors - and Imho this is a great opportunity to sow seeds whether for yourself or for future generation to reap the reward for when recovery and fruition happens - which may look hard to see with all the ‘noise’ that’s around but what goes down must come up and all that jazz….but obviously all down to each other’s perspective and risk management of course. GLA & ATB :)
H1 reports 'Basic earnings per share was 3.52 eurocents, compared to basic earnings per share of 3.40 eurocents in the prior year.'
9x earnings is cheap. No one can deny that.
Under Vittorio this was trading at 25x earnings and yes was overpriced for years. No longer.
Pokerchips, they are also expanding in other markets which are just developing. Vantage is a logical next ' economic' step in a regulated market. Consolidation in that market is also the next logical step. Tele ons has always operated like this hand in hand with the regulators and trade organisations
Pay of FTSE 100 chief executives rose an average of 23% in 2022
Vantage cash is more than sufficient to pay any near term debt
vodger
if you think about it...what they are really doing is selling assets to pay debts caused by paying dividends ....
so dividends then aren't really dividends ..they are returns of asset sells ( the equity then reduced by the asset sell)
the next "dividend" isnt even inflation protected ...
FY fcf guidance is slightly down in the middle of the worst global recession for a long time. Vantage cash is more than sufficient to pay any near term debt and 50% debt is serviced at less than 2% coupon over 10 years out. No liquidity issues and more strategic initiatives landing. Probably the most important initiative is market consolidation and securitisation of subscriber (market) revenues. Ofcom historically leads the way so the VOD 3 UK deal will be important confirmation. I suspect Reed is also weeding out low margin/ loss making activities like wholesale trading and covered that with the slight reduction to FY fcf ie concentrating on sustainable service revenue and fcf
So if you look past the bluster the bare facts here are that Vod's free cash outflow worsened from €1.0bn to €3.2bn. This was caused by lower cash profits and higher licence and spectrum payments. Net debt rose €3.9bn to €45.5bn, yes nearly 4 billion euros more to be serviced & still there are people out there buying. Well the big institutions aren't buying they are selling. My sympathies for those that are below water here, this should just be treated as a utility, a dividend paying utility, although the divi will now come under very real pressure in 2023 as the world enters recession & the UK stays there.
Broker notes up or down since the results ??
"Because it isn't their fault. The UK market has been under attack for years, the market appears to group FTSE companies into the bargain basement bucket for their own reasons"What a load of rubbish! If that is the case how come some other stocks are rising like Aviva, Imperial Brands etc?It is obvious the failure of Nick Read and the Board who has done nothing for years whilst filling their pockets. To reduce the huge debt , the least they could have done would be sell 100% of Vantage (n0t 50%) as outstanding debt is out of control. No vander the activist investor CEVIAN has given up calling VOD too slow.
why is there no pressure from emirate shareholder?
It looks that it will go back towards 100p+
If it is not their fault and they cannot do anything about it, why pay them so much?
Part of their role is to influence the mood music about their company. Too many are complacent - the ex at Lloyds being one prime example.
It will not change until Chairman and large shareholders become much more active in demanding performance.
The market is ruthless if you disappoint - Read has disappointed the market and should pay the price.
The debt is going through the roof and there seems no plan to reduce it. All talk and no action.
i certainly wont be topping up here, 45billion in debt,