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interesting spike to 138p at mid-day.
Fleccy - I understand those concepts and yes I can see massive revenue opportunities for the likes of chip manufacturers and other hardware suppliers as previously 'dumb' equipment is replaced by IOT hardware, and data centres shift from centralised to localised and lots of new servers need to be bought/installed. I can also see massive opportunities for software companies who can supply end to end software solutions for a variety of applications. The growth in those areas is going to be huge. As an example, once driverless technology is refined and approved, at the push of a button Telsa could make all of it's cars driverless and charge £10k ++ pa to every customer who wants it.
Other tech companies like Amazon, Apple and Microsoft are already cashing in big time on the move to the cloud, as they have developed new products/subscriptions that people are paying for. 10 years ago when you bought an iPhone that was pretty much it for Apple, now most people pay for iCloud storage on top of that and they also have other subscriptions like Apple TV, News, Music etc. 10 years ago you would have paid around £100 for a local copy of Microsoft Office that you might only have updated every few years, now you pay £60 a year for Office 365. Amazon Web Services is also by far the largest growth sector for Amazon.
Big tech are raking in the money from the move to the cloud, not the telecoms companies, even though all of the tech companies products are 100% reliant on broadband / mobile connectivity.
Meanwhile, 10 years ago you were probably paying the same or a bit more for a much slower broadband / mobile connection than you are now. Telecom providers have spent huge amounts of money upgrading infrastructure for both mobile and broadband, but aren't charging end users any more for it. They haven't benefitted at all from the move to the cloud, so it's not a given that they will benefit hugely from the next shift to IOT.
Reliance on connectivity doesn't necessarily lead to an increase in price or profits for those supplying it.
Is this going to be the usual afternoon drop after clawing its way back up again - seems nothing can get this share moving upwards !!!
Wonder if it's a Fat Finger trade.
Confirmed, very confusing trade.
2022-05-17 10:51:42 GBX 138.768 17915979 24861645.74 Off-Book XLON TNCP XLON
"IOT will become an integral part of our lives, as will the connectivity to run it, but we'll probably just take that connectivity for granted and end up paying the same or less for it. We already pay less now for 5G than we did for 3G 10-15 years ago, despite the massive infrastructure spend to deliver it. The big winners will be true tech companies offering new products/subscriptions."
Compound, IOT isn't really about people like you and me. The home user already utilises IOT, via broadband, with products like Hive. The big money in IOT will be commercial Macro area applications, like Monitoring, Surveilance, and Control. I expect the new Income will come from Councils, Government, and Corporate. As far as IOT and Cloud, many of the new applications will be latency sensitive, so the cloud servers will need to be geographically close to the IOT equipment. Whole new applications around traffic management, driverless cars, etc, etc, etc will become viable, opening up brand new revenue streams for Telecom companies.
17,915,979 VOD shares bought; 138.7675 p per share @ 11:51:42. value = £24.86 m!
Or the poster is Australian.
Iggypop. A ? at the end of a statement can also indicate that it is not a statement of fact, but a suggestion.
Iggypop. Yes I do, The question mark is also called an interrogation point, note of interrogation, or question point?
Spot on mesh .
Inflation eats away debt.
Why do people not understand this?
Cash is trash.
Looks like sp is on a run now sellers have been cleared. What is there not to like?
Divi coming in 10 weeks, new big shareholder paid £1.30 per share. Results keep confirming divi going forwards, 5G set to boost earnings as well as inflation. It’s a big buy and hold.
I recon we will see £1.40 before ex-divi
compound
a reasoned opinion and good comment
IoT - " Customers tell us that no-one is doing more in this area, whether it’s redefining quality of service, pioneering the use of SIM as a Platform, driving the use of video analytics and visual IoT, looking at 5G for IoT, or coming up with fresh commercial models for IoT customers."
https://www.vodafone.com/business/news-and-insights/analyst-views/vodafone-named-a-leader-in-2022-gartner-magic-quadrant-for-managed-iot-connectivity-services
Funny how it manages to bounce back quickly after being batted down. Some manipulation obviously going on.
Hopefully will get a little rise leading up to ex-Div date.
Mesh - you are of course correct that in an inflationary environment you can expect gross revenue to increase, but business asset prices aren't usually valued on gross revenue, but rather on net revenue. VOD are already increasing prices to existing customers of CPI+3.9%, but in their own forecasts, this increase in gross revenue will eaten up by increasing costs, as their forecast EBITDAaL is flat. That figure also doesn't take into account the increasing debt repayment costs, so net revenue from assets is set to decline in nominal terms, which isn't great at the best of times, but is even worse in an inflationary environment.
VOD aren't going out of business any time soon, but I'd question how much of a possible upside there is in the current inflationary environment when forecasts for profit and dividends are flat, and FCF is down a bit.
They've got to work hard to increase gross revenues just to maintain current profitability and dividends, never mind growth in either. When you strip out any potential for growth, all you are left with is a dividend which at current prices is around a 6.30% yield. That's not too shabby, as current UK corporate bond yields are around 3.28%, so investors are getting around a 3% risk premium which is about right. VOD may be around fair value at the moment, but if bond yields rise further, the SP will need to drop to maintain the same risk premium. Bond yields have increased by around 1.4% since December, and if they rise another 1.4% over the next 6 months, then the VOD SP would need to drop to 98p to maintain the current risk premium.
As for the long term mega profits for VOD with IOT that Fleccy and others think are bound to happen - I'm still not convinced based on their current product offerings. IOT will become an integral part of our lives, as will the connectivity to run it, but we'll probably just take that connectivity for granted and end up paying the same or less for it. We already pay less now for 5G than we did for 3G 10-15 years ago, despite the massive infrastructure spend to deliver it. The big winners will be true tech companies offering new products/subscriptions. The bulk of VOD revenue is still from mobile/broadband packages and that doesn’t look it’s going to change considerably. Even when the spending is 'completed', Telecoms companies won’t be raking in profits if the sector continues with it’s perennial race to the bottom on pricing. If that trend continues, cost savings will just lead to lower prices rather than massive profits.
The results were ok but not great. Price is currently around the half way point between the highs and lows of the last couple of years. If it hits the lows again in the next few weeks/months I’d probably buy a chunk as I can see this being range bound between around 100-140 for the foreseeable future.
Blip over hopefully - lets hope it keeps rising from here
I better post that again, with corrections lol.
A Goldman Sach analyst just did an interview on CNBC. He was super bullish on Telecoms, and said that valuations are now at an inflexion point and to expect big growth in profits and improving sentiment going forward.
VOD generally tracks 'global' GDP and growth is slowing. Consumers are cutting back on media spend and subscriptions.
UK network overhead and 3UK network overhead have duplicated debt which must squeeze the cost cost somewhere else, but not vantage or germany! Africa is more about light touch partnerships and branded access, and presumably what etisalat want (or influence) ie the vodafone brand.
the current argument for regulation and competition is being called out as a race to the bottom. Read wont survive that imo
A Goldman Sach analyst just did an interview on CNBC. He was super bullish on Telecoms, and said that valuations ae now at an inflexion oint and to expect big growth in profits and dentiment going forward.
if....high interest rates are coming and debt will be more expensive ....why would anyone want to pay top Dollar for Spain and/or Italy assets with higher debt costs and added economic uncertainty ? ...
They didn't sell Italy or Spain because they aren't being offered a good enough price for them ...risk related
Sold half their holding, probably off-market to Etisalat.
Thankfully yes VOD does have a near global presence and it’s African assets are now delivering the sort of growth rates it used to enjoy in Europe and the US before its sale of the Verizon stake by Collao. However, Europe is now a highly competitive and regulated mature market so increasing prices might be thwarted by governments, now we have a cost of living crisis, and mergers might still be blocked on competition grounds, particularly by the EU although hopefully the UK government will let a merger with ‘3G’ proceed. Like you I would like to see VOD dispose of its Spanish and Italian businesses but suspect they won’t get a great price for these due their mature status and low potential for growth? (We’ve already seen an approach for Vantage Towers which has a much higher potential for growth from the capital investment community and I wouldn’t be surprised to see Etisalat-e& for for VOD’s high growth African assets once they’ve ‘got their feet under the table. After all, Vodacom is in Etisalat’s ‘backyard’ and they’ve got the UAE government funding them.)
"The dividend is a joke ... they give it to you in one hand and take capital value from the other as the debts rise to pay for it."
The dividend is an anomaly, when you consider it's 9 Eurocents with Basic EPS of 7.20 eurocents, but I trust they know what they're doing. I suspect earnings are expected to rise significantly in the coming years, with the dividend rmaining at the current level. If you trust that earnings will increase, and you don't need the cash, it would make sense to reinvest future dividends back into the stock.
Hard to believe that years ago Vodafone bestrode the London market with a valuation of over £200 billion. Since then it has been a steady story of value destruction. I have hung on the line for a long time now but I do wonder whether someone should put the company out of its misery and just break it up.
comsman, I tend to disagree simply because of VODs unique global coverage and diverse business model relative to other telcos.
Also, with increasing prices, debt will reduce accordingly. Should really have they dispose of Italy and Spain at any time and get 20billion+ for it. You need to look at the business as whole and not staring blindly at the liabilities. There is an asset side to the balance sheet;-)
With your viewpoint 90%+ of all mortgage holders are doomed as they are employees and they can lose their jobs at anytime. Yet, Vod is a lot safer than that analogy given their utility status.
Another fair point but you also need to consider the significant rise in interest rates that are coming down the line and as existing debts and bonds mature, VOD will incur much higher interest rates which will at least offset the benefits to debt from inflation. As I said previously VOD’s biggest problem is it’s debt.