The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Thanks Ciccio for posting. This is deemed low.
But even at this level, it puts Vodafone as a whole at circa €100bn or £85bn EV if proportionately calculated by revenue. This mean equity value of £47bn ex debt versus market cap of £37bn today ie 27% upside or 177p. Of course, we know this undervalues to consolidation play benefits. Very simplistic calculations as Italy is hardly the growth market, but a basis nonetheless.
It is no wonder analysts are coming up with sums of parts valuation and upgrading targets which are between 165p (low) - 230p (high). Based on above, 200p is possible.
Italy represents 11% of the group revenue and they are offering about 10% of enterprise value.
This would leave them with a market with a competitor less. The offer does not look compelling.
Sell and pay off dept? would bring that pile down.....
Hi dan, well don't mind him winning, as long as it's the top price and not the bottom, will we pass the 140 or not by Friday ? and where will the top be, getting interesting now, hope it doesn't end in tears
Hello Robleo. He is only going to win again?! Unless Moneyboy comes in with his usual late bid? From negative to positive in a couple of weeks. Insider info I think??
https://finance.yahoo.com/news/iliad-offers-12-6-billion-164628170.html
So two great examples today. The sp after hitting a high late today fell back,but then shot up at the end, (What goes down, must come up) example 1. Then we have Patients very impatient comment, when are the shares going to hit £2? example 2. Great day today though, unless you think your investment should always go up, or just stay the same, but never fall. Try investing in a building society if that is what you want?
That's all very good, Narcus, but when are the shares going to hit £2?
Sorry bit got chopped off the bottom
Broker Numis thinks BT may find it tricky to improve UK profitability in the near term because of "Britain's cost of living crisis, intense retail market competition, and intense competition for labour to grow rival FTTP networks".
Despite the underperformance of a few of their assets and the rising costs of capital expenditure, both businesses continue to be very cash generative. Broker Numis expects Vodafone’s free-cash-flow yield to increase from 6.7 per cent to 8.7 per cent in 2023, while it expects BT’s to reach 5.3 per cent by 2023.
The rotation towards value stocks at the beginning of the year has benefited both. Vodafone and BT are up 17 per cent and 11 per cent, respectively, since the turn of the year. This could create a virtuous circle. Higher valuations gives them an option to turn to equity markets in the search for cash alongside disposals. Activist approaches are stressful for board members, but the market will hope this is the beginning of the telecoms turnaround it has been waiting for since 2018.
BT and Vodafone expected to speed up consolidation under activist pressure
The telecoms giants have been trying to consolidate their businesses as they look for extra cash to fund big capital expenditure
February 9, 2022
By Arthur Sants
Vodafone (VOD) and BT (BT.A) face similar problems. They are both investing heavily amidst a period of inflation while trying to manage huge debt piles. They now both have aggressive external investors building up stakes in their businesses as well. At the end of last year, French telecoms billionaire Patrick Drahi increased his holding in BT to 18 per cent and at the end of January Scandinavian activist investor Cevian took a stake in Vodafone.
Neither investors have publicly stated their intentions for the telecoms giants, but their presence has generated speculation they will speed up their corporate restructuring. Given the cash needed to upgrade 5G and broadband services, both BT and Vodafone have been looking for ways to offload assets either through disposals or joint ventures.
VOD:LSE
Vodafone Group PLC
1mth
Today change
1.52%Price (GBP)
139.31
In defence of Vodafone CEO Nick Read, it is difficult for him to move any faster. He has completed 19 deals since taking over in 2018 – including the IPO of the Vantage Towers (Ger:VTWR) business. The latest decision for the board is reportedly whether to sell off the company's Italian division to French company Iliad, which – according to the Financial Times – put in an offer this week.
Investors are hopeful Vodafone can further decrease exposure to stagnant international markets, so the greater activist pressure could see a deal done. In the third quarter of last year, organic revenue continued to decline in both Italy and Spain, despite favourable comparators against a disappointing last year.
BT is a different proposition as it doesn’t have nearly as big a European presence. However, investors are still keen for it to focus on its core UK broadband and 5G market. They will therefore have been pleased to see BT enter into a joint venture with Discovery for its barely profitable BT Sport product earlier this month.
The next hope is BT might find a buyer for its Global Service business, which saw adjusted cash profit (Ebitda) fall 27 per cent in the first nine months of last year. Global contributed just 5.6 per cent of BT’s overall cash profits for the period. Given that BT has increased capital expenditure by 24 per cent to £3.75bn in the same period – much faster than its 2 per cent improvement in adjusted cash profit – an influx of cash now from a disposal would be very handy.
Broker Numis thinks BT may find it tricky to improve UK profitability in the near term because of "Britain's cost of living crisis, intense retail market competition, and intense competition for labour to grow rival FTTP networks".
Despite the underperformance of a few of their assets and the rising costs of capital expenditure, both businesses co
Ofcom opens door to Vodafone-Three merger in overhaul of mobile phone market
Telecoms watchdog will review takeovers on their merits, rather than throwing out a deal because it would reduce competition
By
Ben Woods
9 February 2022 • 11:48am
The telecoms watchdog has opened the door to a mega-merger between Vodafone and Three UK after cooling its concerns around mobile consolidation.
Ofcom said it will review takeovers on their benefits and pitfalls, as opposed to throwing out a deal because it would reduce the number of competitors.
Mobile operators have been calling on regulators and governments to dial down their control of the industry, as they grapple with stubbornly low returns.
Nick Read, chief executive of Vodafone, recently branded the UK a "crowded marketplace" that needs consolidation to help spur industry investment in next generation 5G connectivity.
Vodafone has been strongly linked to a merger with Three UK, as part of pan-European consolidation drive to shore up its weak share price and ease pressure from the Swedish activist investor Cevian Capital.
Announcing a review of mobile markets and spectrum, Ofcom said the industry has served customers well through competition between BT's EE, Vodafone, Three UK, and O2.
However, the watchdog said it needed to take steps to clarify the future of its approach on regulation so it continued to support investment.
Outlining its position on mobile mergers, it said: "Our stance on a potential merger would be informed by the specific circumstances of that particular merger, rather than just the number of competitors."
Ministers want to blanket the majority of the country in 5G technology by 2030 as part of ambitions outlined by Michael Gove, the Levelling-Up Secretary, last week.
The Government hopes that 5G will usher in radical technologies from driverless cars to interconnected smart cities, with speeds that are more than 100 times faster than 4G downloads.
Meanwhile, the Government intends to switch off 2G and 3G signals by 2033 to ensure there is enough capacity for the 5G network.
Looks like Fleccy's "narrative reversal" is in full swing
Can anyone post this?
It will be interesting to see the details of this offer. Italy makes up about 10.5% of VOD total revenue. An offer of 10.5bn EUR would equate to an EV of around 100bn for the group. Take off net debt of circa 45bn and that gives an equity value of 55bn EUR or £46.6b which would be £1.72 a share.
That calculation assumes that the debt of the Italian operations is in line with the group total, and I don't know if that is the case or not.
That valuation for the group also doesn't take into account that VOD would be offloading one of it's divisions where revenue is declining, and keeping the ones where revenue is increasing, so on that basis it still undervalues VOD.
Quite interesting to see how VOD is currently worth a lot less than the sum of it's parts, and to get a feel for the scope for improvement that the activist investors have seen.
Update?
Be glad when this skiing finishes - getting regular again now !!!!!
£1.40 not far now. GLA
Not many hills with me Dan, from south west wales
Hope we get a good up day tomorrow
best of luck
Yes robleo, I am going to Italy on the 19 March for the sun, snow, skiing & cider, In march it can feel very warm in the Italian dolomites with the strong sunshine. I don't know what part of wales you come from, I have been up Snowdon, & nice as it is, it is a not a patch on the Italian dolomites. Nothing against Wales though, which I think is probably nicer than England, especially if you like the hills & mountains, which I do very much. Anyway, talking about high's & lows, lets hope tomorrow will end on a high.
not for me Dan, we love to get away from the cold and rain, sun, sand and sangria or san Miguel for us or similar, Is it Italy your going to ? Stayed in a beach resort there before, Lido de Jesolo, and took a boat trip to Venice, but not been near the ski slopes
O well, & there's me thinking all you rich stock market investors were jetting off to the ski slopes each year? Just me then? You should try it? It beats Snowden, or box hill? Yoddle loddle la te too.
Hi Dan, I don't know much about ski slopes, but I think I get your drift?, so Mikey wants it to keep climbing the mountain without stopping for a break, and stop acting like a Tarts Knickers, because it's not good for the blood pressure
Rocket robleo. Of course they don't, not a clue. I will try to explain in my usual joking way? So, ref to ski slope posts, (by you know who) the giant slalom is not that steep compared to the flying k. Are there no skiers on here that can back me up?? ( Even jokingly) I am talking steep slopes here, not the Welsh hills?? My point was, that was a very steep fall today, almost vertical, not to be compared with the giant slalom? I just hope your rocket isn't running out of fuel? Mystery & suspense? yeah, loving it? no narrative reversal, or steep ski slopes tomorrow please?
I don't like to say anything guys, but does anyone know what Daniel is talking about ? a lot of mystery and suspense here at the moment, everyone is wondering how high this can go, or indeed have we already reached the top ?, check back here Friday all will be revealed, well for this week anyway
GLA
Equita estimated that Vodafone Italia, which also competes against CK Hutchison Holdings' Wind Tre and former monopoly Telecom Italia, has an enterprise value of between 11 billion and 13 billion euros ($13-15 billion).
Analysts at Banca Akros estimated Vodafone Italia's enterprise value at between 9 and 9.5 billion euros, adding that they expected Iliad could be willing to pay more than 10 billion.
https://uk.news.yahoo.com/iliad-confirms-made-offer-vodafone-151628510.html