The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
'big growth potential'
Yes, some growth numbers in the FY.
Africa and Turkey are 23% of the group
South Africa service revenue +2.6%, EBITDAal +1.7%
Egypt service revenue +21.1% EBITDAal +10.2%
Turkey service revenue +47.6% EBITDAal +49.8%
Internationals service revenue +5.3% EBITDAal +1.5%
UK is 9% of the group..service revenue +5.6%, EBITDAal ex energy +4.1%
Other Europe is 11% of the group..service revenue+2.8%, EBITDAal +4.7%
Plenty of growth to work with and Germany 36% of group, scale action plan in flight to restore service revenue and flows through to EBITDAal.
Simple!
Its crazy. In only a few weeks the statutory authorities have to sign off on a 'true and fair view' and in particular, that net assets/ equity = the lower of cost and net realisable value. Yet here we are down in the low €20Bns.
I can imagine the directors signing off based on the deals they have been discussing for the sum of the parts. I can imagine the auditors signing off based on the evidence, Vantage being case in point.
But the market doesnt get it. No regulator, no assets, no service. Maybe Canning Fok over at 3 can push UK over the line or else, MDV gets a share of 10m subscribers as 3 exits the market. MDV also showing UK below the WACC even with its recent performance
'weak form of the EMH'
A couple of posters have referred to a double bottom at 83p presumably referring to historic patterns as a prediction for future.. I dont know
'The most revealing chart in Della Valle’s presentation was the one about returns on capital. The UK, Italy and Spain were shown as recording returns below the group’s cost of capital and even Germany – where Vodafone is market leader – was just “around” cost of capital levels. That’s a very poor starting position. The dividend was held this time but a 9% yield says the market wonders for how much longer.
The presence in the wings (and now on the board) of Emirates Telecommunications Group with a 14.6% stake offers the vague possibility of alternative excitement. Really, though, a turnaround comes down to Della Valle’s ability to secure value-creating deals. If nothing else changes, Vodafone, even with 11,000 fewer workers, will still look like a sprawling conglomerate that is currently valued at a massive discount to the supposed sum of its parts. Nobody would design the structure today.
Della Valle deserves the benefit of the doubt on her first big City outing, but the latest fall in the share price can’t be blamed solely on the weak cashflow forecast for this year. Part of it surely reflects a sense that, for all her candour about Vodafone’s performance, investors have yet to discover how radical she’s prepared to be in cutting Vodafone down to coherent size. It’s a tough gig, but shareholders’ mood is for maximum radicalism.'
https://www.theguardian.com/business/nils-pratley-on-finance/2023/may/16/vodafone-new-boss-margherita-della-valle
'If you are subsidising the dividend using asset sale money...then in real terms you already have reduced the performance dividend'
I think MDV is expert at balancing cashflows. I expect the cash guidance to be beaten in her 1st year. She will be out if she doesnt
Ouch
Yep. Profit for the year increased from €2.8Bn to €12.3Bn too. Just nice to take a moment and recognise those numbers after a torrid few years.
I didnt think there would be any surprises but that number surprised me.
Its all change at VOD. E& believe it, so do I
Strategic shifts
Our target is to be a best-in-class telco in Europe and Africa, and become Europe's leading platform for Business. To achieve this, we must change in four essential areas.
· We will rebalance our organisation to maximise the potential of Vodafone Business, which continues to accelerate growth, has a unique set of capabilities and has a strong position in a large and growing market as organisations digitise.
· In order to win in our consumer markets, we will refocus on the basics and deliver the simple and predictable experience our customers expect.
· We will be a leaner and simpler organisation, to increase our commercial agility and free up resources.
· We will focus our resources on a portfolio of products and geographies that is right-sized for growth and returns over time.
3. Our action plan
To execute the change in these four areas, we have an action plan already underway, focused around three priorities: Customers, Simplicity and Growth. Early examples of this action plan include:
· Customers: Significant investment reallocated in FY24 towards customer experience and brand
· Simplicity: 11,000 role reductions planned over three years, with both HQ and local markets simplification
· Growth: Germany turnaround plan, continued pricing action and strategic review in Spain
We will change the level of ambition, speed and decisiveness of execution. We will have empowered markets focused on customers, scale up Vodafone Business and take out complexity to simplify how we operate.
A more detailed outline of the new roadmap for the transformation of Vodafone is contained within an accompanying video presentation available here: investors.vodafone.com/results.
https://www.londonstockexchange.com/news-article/VOD/fy23-preliminary-results/15957616
97p again for me please
'One of the attractions is said to be a split in management between the retail operations and the networking/B2B side.'
Thats interesting Jatw. Darren Purkis of 3 fits that model perfectly (retail operation) and Hutch want to get a return on their investment (must be €5Bn loan or so on their intercompany with 3 UK) which fits the networking/ spectrum side. Exciting stuff imo
Robleo, yes the SP has dropped along way the last 5 years. But this last 12 months or so various parties have offered sums which in total suggest the sum of the parts are indeed at least = to the carrying value of the net assets. Many interested in why it isnt reflected in the SP (perhaps thats the debt derivatives/ options on the SP and why NR exited?). And with E&, Liberty Global and Iliad falling over themselves to buy large tranches of stock, when do the iis who are 'rebalancing' away from VOD get replaced by serious investors. E& even suggesting they may go for 20% and a 2nd exec on the BoD and perhaps 25%. This time it may be different LoL?
** sorry typo, 'I am hoping for the SP to treble' but was thinking of Deutsche rating when I wrote double and the '184p net assets per share' scaredy pointed out. Anyway, we get a dividend while we are waiting
Thats interesting Gary59. I am hoping for the SP to double and will take any dividends along the way. Many will remember the previous CEO promising a dividend and then cutting it. I agree with Scaredy, this next div looks baked in, after that the new BoD are on the hook for something value creating even if it means cutting the dividend
It is worrying that the BoD have started playing musical chairs and revolving door management comes to mind. However E&, Liberty Global and perhaps Iliad are on hand to make money not lose it
Jax think that plays to the market consolidation strategy which MDV translates into lower costs and fcf to pay a dividend. Think 3 UK deal is the bell weather deal and will confirm direction in EU.
With the BoD moving the seats around and E& on board, it's a waiting game. Market wont like it but the cash will keep flowing.
I have already spent the next dividend :-
88 would be disappointing but so would missing 188. Just wait and see and pick up the div in the meantime gla
'Is it good or bad news?'
Good news for PI investors imo. I got 97 in the friday prophecy too LoL
Two fat ladies at the gate 88 or Vodafone in heaven, lucky number 97?
'See Three playing hardball re merger.'
Yes, canning fok doesn't fok about
'You have your opportunity it seems.'
Didnt in the end. If it claws it's way back up for the end of the day tomorrow then I will wait for the results as E& still got 110m to buy under there 15% approval. Think this div is secure. Dont know what the market will do if the results are uninspiring whilst E&, Liberty Global and Illiad are building big stakes..
'Should be adding on any dips in the SP here.'
I will be adding more under 92.5, otherwise its hold for the results next week
If 3 exit UK telecoms, VOD has the opportunity to pick up a share of their 10.3m subscribers which would lift the revenue growth curve..
https://www.msn.com/en-gb/money/other/vodafone-merger-extremely-difficult-amid-national-security-fears/ar-AA1aXtUR?ocid=msedgntp&cvid=54257fbd34ea488d8ac7f40dd31792f8&ei=22