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(Alliance News) - Telecommunications firm Vodafone posted a "resilient" performance for its recently ended financial year, despite a decline in revenue.
Vodafone shares down 6.2% early Tuesday while the broader FTSE 100 index was higher.
Revenue for the financial year to March 31 was EUR43.81 billion, down 2.6% from EUR44.97 billion the year before but beating market expectations of EUR43.64 billion. Vodafone cited the impact of the Covid-19 pandemic on roaming charges, amid foreign travel restrictions, for the decline in revenue. This was offset somewhat by the acquisition of assets from Liberty Global.
In 2019, Vodafone completed a deal to acquire Liberty Global's operations in Germany, Czech Republic, Hungary and Romania for an enterprise value of EUR18.4 billion.
More positively, Vodafone's pretax profit jumped to EUR4.40 billion in the recent year from just EUR795 million the year before, after financing costs fell to EUR1.03 billion from EUR3.55 billion.
Adjusted earnings before interest, tax, depreciation and amortisation fell 3.3% - or declining 1.2% on an organic basis - to EUR14.39 billion from EUR14.88 billion. Adjusted Ebitda was expected by market consensus at EUR14.54 billion, so this was missed slightly.
Newbury, England-based Vodafone kept its dividend for the year steady at 9.0 cents, as expected by market consensus.
"I am pleased that we achieved full-year results in line with our guidance, and we exited the year with accelerating service revenue growth across the business, with a particularly good performance in our largest market, Germany," said Chief Executive Nick Read.
For the year ahead, Vodafone expects adjusted Ebitda between EUR15.0 billion to EUR15.4 billion, and adjusted free cash flow of at least EUR5.2 billion.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.7% at 7,080.94
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Hang Seng: up 1.3% at 28,565.90
Nikkei 225: closed up 2.1% at 28,406.84
DJIA: closed down 54.34 points, or 0.2%, at 34,327.79
S&P 500: closed down 10.56 points, or 0.3%, at 4,163.29
Nasdaq Composite: closed down 50.93 points, or 0.4%, at 13,379.05
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EUR: up at USD1.2188 (USD1.2146)
GBP: up at USD1.4183 (USD1.4119)
USD: down at JPY109.06 (JPY109.20)
Gold: up at USD1,869.50 per ounce (USD1,865.60)
Oil (Brent): up at USD69.72 a barrel (USD69.24)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
1100 CEST EU gross domestic product
1100 CEST EU unemployment
1100 CEST EU foreign trade
0830 EDT US housing starts
0855 EDT US Johnson Redbook retail sales index
1000 EDT US ISM manufacturing and services report on business economic forecast
1630 EDT US API weekly statistical bulletin
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The UK jobs market has been "broadly stable" in recent months, the Office for National Statistics said, with the unemployment rate unexpectedly edging down. The unemployment rate was 4.8% for the three months to March, easing from 4.9% in the three months to February. Consensus, according to FXStreet, had seen the March reading holding steady at 4.9%. "The latest figures suggest that the jobs market has been broadly stable in recent months, with some early signs of recovery," the ONS said. The number of payroll employees increased for a fifth consecutive month in April, though does still remain 772,000 below pre-pandemic levels. The largest falls in jobs since February 2020 have been in the hospitality sector, among those aged under 25 years, and those living in London.
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BROKER RATING CHANGES
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BARCLAYS RAISES AVIVA TO 'OVERWEIGHT' ('EQUAL WEIGHT') - TARGET 466 (387) PENCE
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BERENBERG INITIATES LIONTRUST ASSET MANAGEMENT WITH 'HOLD' - TARGET 1,700 PENCE
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BERENBERG INITIATES GRESHAM HOUSE WITH 'BUY' - TARGET 1,050 PENCE
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COMPANIES - FTSE 100
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GlaxoSmithKline and Canadian partner Medicago reported positive interim phase 2 trial results for Medicago's plant-derived COVID-19 vaccine candidate, which has been tested in combination with GSK's own vaccine candidate. They said neutralizing antibody responses were 10 times higher those than in people recovering from Covid-19, and no related severe adverse events were reported in the trial. "After two doses, the adjuvanted vaccine candidate induced robust neutralizing antibody and cellular immune responses in all subjects, irrespective of age," said Nathalie Landry, executive vice president for Scientific & Medical Affairs at Medicago.
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Tobacco company Imperial Brands raised its interim dividend by 1.0% to 42.12 pence per share from 41.70p, as it said it is on track for financial 2021 results in line with guidance. In the six months to March 31, pretax profit jumped to GBP2.06 billion from just GBP785 million a year before, as revenue rose by 6.1% to GBP15.57 billion from GBP14.67 billion. Organic adjusted net revenue was GBP3.57 billion, up 2.4% or 3.5% at constant currencies. Imperial said organic tobacco volumes were down 3.3%, duty to weaker duty free sales, but next-generation product revenue bounced by 16% from a weak prior-year period.
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Phoenix Group Holdings, noting press reports, confirmed it is in advanced talks over a potential sale of its European businesses. "A sale of the European businesses will only be considered if it maximises value for shareholders. Discussions are on-going and there can be no certainty that any transaction will be agreed," the long-term savings and retirement business said. Earlier, Sky News had reported that Phoenix is close to agreeing a GBP550 million deal to sell its European operations to European Life Group Holding, a privately owned vehicle backed by the US-based fund Sixth Street. Phoenix back in November confirmed it was mulling a possible sale of its European businesses.
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COMPANIES - FTSE 250
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Oxford Biomedica raised its guidance after pharmaceutical firm AstraZeneca committed to an increase in the number of Covid-19 vaccines needed from the gene and cell therapy company in the second half of 2021. The two signed an 18-month supply agreement in September under a three-year master supply and development agreement for the large-scale commercial manufacture of the Oxford-AstraZeneca vaccine. As a result of Astra's commitment, Oxford Biomedica raised its revenue guidance for expected cumulative revenue from Astra by the end of 2021 to in excess of GBP100 million, from in excess of GBP50 million previously, and as such expects "significant growth" in operating Ebitda this year.
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COMPANIES - GLOBAL
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Amazon.com is in discussions to acquire the MGM film studio for about USD9 billion, the Financial Times reported, citing "people familiar with the matter". The newspaper noted that MGM is one of the few remaining independent Hollywood studios amid industry consolidation. The purchases of Fox by Walt Disney, Universal by Comcast, and Paramount by ViacomCBS in recent years were followed by confirmation on Monday by AT&T of agreement to merge WarnerMedia with Discovery. The WarnerMedia-Discovery merger is intended to create a video streaming provider that can compete with Netflix Inc, Disney+ and Amazon's own Prime services.
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Tuesday's Shareholder Meetings
4imprint Group PLC - AGM
accesso Technology Group PLC - AGM
Cairn Homes PLC - AGM
Chaarat Gold Holdings Ltd - AGM
Chesnara PLC - AGM
Fidelity Japan Trust PLC - AGM
Forterra PLC - AGM
IQGeo Group PLC - AGM
Metro Bank PLC - AGM
Myanmar Strategic Holdings Ltd - AGM
Royal Dutch Shell PLC - AGM
Standard Life Aberdeen PLC - AGM
US Solar Fund PLC - AGM
Vivo Energy PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
