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My question was a very serious one I feel, to mole, fleccy, or anybody else who can bothered to take it seriously. What is free cash flow? Why was vod considered a cash cow? We seem to have only 2 people left on her that have a clue what they are talking about in these matters. fleccy in the blue corner & mole in the red corner. Complicated I know, but just," I say up, you say down" is just pointless nonsense. (apart from roofers prophecy game of course)
I can only give you examples from a description on the internet:
"Free cash flow is the money that the company has available to repay its creditors or pay dividends and interest to investors."
https://www.investopedia.com/terms/f/freecashflow.asp
Vodafone define Free Cash Flow as:
"Free cash flow is Adjusted EBITDAaL after cash flows in relation to capital additions, working capital movements in respect of capital additions, disposal of property, plant and equipment and intangible assets, integration capital additions and working capital related items, licences and spectrum, interest received and paid, taxation, dividends received from associates and joint ventures, dividends paid to non-controlling shareholders in subsidiaries and payments in respect of lease liabilities."
In Vodafone's case they tend to use an Adjusted Free Cash Flow figure with the adjustments comprising:
"Adjustments:
- Licences and spectrum
- Restructuring costs including working capital movements
- Integration capital additions
- Vantage Towers growth capital expenditure
- Other adjustments"
"Adjusted free cash flow is Free cash flow before licences and spectrum, restructuring costs arising from discrete restructuring plans, integration capital additions and working capital related items, M&A and Vantage Towers growth capital expenditure and other. Growth capital expenditure is total capital expenditure excluding maintenance-type expenditure."
Vodafone's Unadjusted Free Cash Flow was reported as €1.442 Billion, with Adjusted coming in at €4.842 Billion.
Just to add to my last post, in Vodafone's case Free Cash Flow is only part of the picture for last year. If you want understand how Free Cash Flow relates to EBITDA and Net Debt, look at page 20 of the last set of results:
https://investors.vodafone.com/sites/vodafone-ir/files/2023-05/Vodafone-FY23-Results-Announcement.pdf
Morning fleccy, but it's not all/only about free cash flow it's also about profits.
In the last set of results , BT's Rev was £20.68bn with profit £1.73bn Divi 7.7p
VOD 's Rev was $45.7bn with profits of $14.7bn and Divi 7.8p.
So VOD can afford Divi no trouble and once the new merged company gets moving with bigger turnover and bigger profits theres nothing to say the Divi can't be 8p-10p.
Time to buy more now as in the long term the SP is only going up from here, regardless of what other posters say.
You are aware the Vod numbers included a large one off exceptional item. (Gain on disposal of Assets). You strip that out and the profit doesn't look as rosey, from memory the underlying profit doesn't even cover the dividend. Hence the market expectation that a Div cut is coming. Yes actions taking place will improve the dividend cover but don't expect any raise anytime soon. For one, the politcal fall out of rasing the dividend off the back of potentially getting the merger approved would be sizeable
Jedclampit, sorry, but you are not factoring in the number of shares the dividend is payable on.
I am afraid you are comparing apples with oranges.
I don't care about any of that, just go and look at the Divi history for VOD , they were paying 10p ish from 2015-2018, so no reason not to go back to that with bigger turnover and bigger profits.
Beo1,who says the city / market expectation that a Div cut is coming.
Who says the politcal fall out of rasing the dividend off the back of potentially getting the merger approved would be sizeable. no one is saying that only the de-rampers with negative points of view.
You could say that about absolutely any company. Make more profits = return more to the shareholders. What makes vodafone more appealing and likely to do it than any other company. Bear in mind those other companies are probable operating at a better PE ratio and have a better dividend cover starting point. Vodafone need to get the earnings to a place where the current dividend is sustainable before worrying about dividend growth.
Cannot believe this dogshxt still holding .70. Declining business model, drowning in debt and crushed by regulation and poor management, I mean ftse a no go area full stop since 2018 unless you want your capital vaporised but only reason I can think this is still holding 70 is some imbeciles believe the dividend will be held. Poor fools.
Just joining with 3 in the UK won't materially change the SP. Fundamentally we go from owning 100% of VOD UK Share of market to 51% of the 3 / VOD share of the market. But it should enable better economies of scale and improve the return on Capital, but the UK is only a small % of Vodafone, so no I dont think the merger with 3 alone makes this share worth materially more, but it moves it in the right direction, and some of the SP is depressed due to negative sentiment so small steps in the right direction help to move the SP in the right direction
The combined business will invest £11 billion in the UK3 over ten years to create one of Europe's most advanced standalone 5G networks, in full support of UK Government targets.
VOD & 3 have already signed the deal and it will go ahead but will take a few months to get sorted. By having a best-in-class 5G network in place sooner, the merger will deliver up to £5 billion per year in economic benefit by 20304, create jobs and support digital transformation of the UK's businesses. Every school and hospital in the UK will have access to standalone 5G by 2030.
Dan, this is a business, where at times heavy investments are required to ensure a competitive edge in lock step with evolving technologies. Vod has in the past few years made heavy investments in 5g, fiber roll-outs etc., which have weighted on the free cashflow. Add to this the spectrum auctions, of which no more big ones are planned for a foreseeable future. Should the 3 merger take place, the new entity can sell redundant bandwidths to competition or to simply use it as a competitive edge.
Sadly, prior to that they were bogged down with the write-downs as a result of Colao's idiotic acquisitions. The Indian government also screwed Vod royally and this is something the UK government should bear in min in their future negotiations with these crooks and they should definitely recognise the hit Vod has taken. Write-downs/offs affect profitability and not cash flow for those who want to know.
Anyway, moving forward, I foresee less capital investments in system upgrades such as 5g, spectrum, but fiber investment will continue until the desired coverage is achieved - Germany in particular. The debt schedule is also favourable as no major refinancing is required for another 4-5 years, before which enough cash has been generated to take of that. IoT and business services unit will generate tons of cash in the coming years. Its just started revving up.
The new CEO is lowballing the FCF like Tufan did with RR. I expect FCF to be in excess of 5bn this time next year.
"I expect FCF to be in excess of 5bn this time next year."
Mesh, Vodafone are forecasting Adjusted EBITDAaL broadly flat and Adjusted Free Cash Flow of €3.3 billion for FY24. I prefer your figures.
Dan, i don't know about free cash flow, but what we need here is increasing cash gains, there is one thing i can tell you is total returns is all that matters as an investor, not just dividends, if you look back at the previous total returns it's enough to make you cry, we just need the share price to rise mate, we don't want to be losing our capital
Of course total return is what matters, that is the whole point of my original post. No good good paying a big divi if the sp is falling by the same, or more than the divi. I just think this free cash flow thing is just confusing the issue. With all due respect to jedclampit, I don't think he has a clue, & nobody can call me a de ramper! Divi cover needs to be above 1.5 to be ok, so hopefully vod can achieve that. By all means be possitive, but not blinkered please.
Jaxi wrong again!! As usual
Robleo - is you on holiday yet or still hear in England?
If you was able to get desperate Dan to put up his email address I would be alright to contact him direct so he don't get mad when you is away.
He seem to trust you cos of your medical expertise in phychiatric and brain soothing techniques.
Don't worry, I does not intend upsetting him.
Fleeces - you is always ramblin on about stuff that you or anyone else don't understand like you has been reading the annual reports.
All you need is the bottom line, the annual profit an weather it is better or worse than previously.
Gutter , not going until Monday, you look after my friend Dan while I'm away, and no upsetting him please, tell him you think the share price will go up that should make him smile
Wacism - according to left wing academics and folks like Jeremy Corbyn, wacism is learnt and does not come naturally to children.
Wiv that in mind I has decided that my 5 year old niece will have to be taught the N word.
Any advice on how to approach the parents will be much appreciated 👍.
Rob. now you really are worrying me. You will be calling him your Amigo next. Or could you be the same person? If he is your patient though, you need to try harder, because it is clearly not working. How many times now has he come up with his N word comment/joke. I think he may have a memory problem (constantly repeating himself). He is still trying to wind up fleecy, time he gave up that one I think. Let's hope your well derserved holiday will help you with all those points I have made, & we can all return to sanity.
Fleccy, I am, indeed, aware of the communicated cfc for FY24, but I do believe the actual number will be much higher. Also the hike in prices will have kicked in properly by then.
MDV is lowballing in my book. Also never underestimate an Italian woman😉
Sorry Dan, i couldn't resist the wind up, i was waiting for you're reply
Don't think he's taken his medication today
Nice up day today will be happier when it gets closer to 80p that will be a good start
Desperate Dan seems to have stopped reacting to GS. I remember the time GS alleged that Dan had a plastic a n u s sex toy, Dan was going quite mental that time, very funny.