Member Info for comsman

For anyone who watched Margherita della Valle’s share-cast yesterday it was obvious that Germany remains a concern even though things have improved there. Germany may be VOD’s largest market but it is only the number three mobile operator by subscriber numbers behind Deutsch Telekom and Telefonica. In one question from an analyst Margarita admitted a potential further fall in broadband and mobile customers next year and in another question (I think from Polo Tang UBS) she recognised a possible merger between Telefonica and 1 & 1, the number four mobile operator, would result in even more difficulties for the company; EU competition authorities are now more open to mobile network mergers. Me humbly suggests Germany alone is the reason for yesterday’s significant SP fall and without sustained improvement in Germany the SP is going to be stuck below 120p.

…..Germany continues to disappoint with a small year on year decrease in service revenue. That said there are plenty of positives elsewhere but I don’t expect a meaningful increase in the SP today and based on past years it may well drop a couple of percent, imho. Still believe VOD is a buy, decent dividend and loads of growth potential.

that **** at ubs is back at it again running down the sp. the fact that we’ve seen him make three

sp predictions in as many months is dodgy by itself imo but when the prices he quotes are obviously so out of line with market sentiment it makes me wonder if he’s not deliberately trying to get the price down for personal financial gain? think this guy should be looked at by the financial regulators just to check him out.

Underwhelming - don’t expect any uplift in the SP today.

Looks like the Dividend will be reviewed following any deal in Italy and if that’s the case we know what direction it will go in. See the last but one paragraph.

https://www.reuters.com/business/media-telecom/vodafone-be-minor-partner-any-italian-tie-up-with-swisscom-sources-say-2024-02-27/

Article identifies potential sale of Vod’s Italian operations to Fastweb, the smallest existing operator in Italy that is owned by Swisscom.

https://www.bnnbloomberg.ca/swisscom-s-fastweb-is-said-to-explore-deal-for-vodafone-italy-1.2002702

Barclays are reporting that it will take considerable time before the structural changes and disposals at Vodafone have a material affect on the company’s financial performance. Given that the Spanish sale won’t close until the second half of 2024, the UK CMA is not expected to even rule on the proposed merger with Three until the end of 2024 and as yet there is not even a proposal for offloading or merging the Italian operations, what Barclays report makes sense. Vodafone is a good buy, imho, but I’m not expecting any dramatic increase in the SP and believe it will be gradual over the next three financial years. Have been in this position previously with Cable and Wireless and have learned that patience is the key. BTW, Barclays are also suggesting a divi cut in FY2025 down to 6 Eurocents.

Thanks ‘fleccy’, couldn’t find these myself. Encouraging numbers.

SSE just announced bumper profits and eps but then go on to say they are going to cut the dividend back to 60p in 2024.

Don’t expect a new CEO to deliver big SP gains anytime soon. Vod’s strategy to simplify its structure by selling or merging assets takes time unless you sell on the cheap, which to be fair to Nick Read he wasn’t prepared to do. He rejected the undervalued Iliad offer for the Italian assets and apparently has been hard nosed in his dealings with Three UK (Hutchison). On top of simplifying it’s structure comes the issue of debt and the only quick way to do that is to reduce the dividend. Nick Read did this shortly after becoming CEO so expect the new permanent CEO to do the same. Consequently, I don’t see the departure of Nick Read as good news for those, like me, who have primarily invested in avid for income.

Have been a long term customer of BT for broadband and mobile etc but when I did a mobile renewal today I was switched to a new dedicated EE account complete with a separate direct debit just for my mobile. What is BT’s strategy here? Once upon a time there was a big drive to offer ‘quad-play’ services to create ‘sticky’ customers. Is BT looking to engineer a future split of the fixed and mobile operations?

Seems Read and Co are looking to make a couple of ‘major’ announcements on November 15th. Firstly according to Bloomberg, KKR seem to be the favourites to take a minority stake in Vantage Towers which would deliver about $4 Billion in cash and help a bit to pay down Vod’s net debt, circa 67$ Billion. Secondly the merger with Three UK with Vod taking a majority 51% controlling stake in the new company, subject to UK regulatory approval. You would think ‘good news’ like this would see a decent SP increase but with Vodafone you can never tell. ??

Some valid points there fleccy.

Whilst both Vodafone and Three have millions of customers for their respective mobile networks only Vodafone has cable and fibre infrastructure, and very extensive it is too. This for me makes it difficult to understand the 51% to 49% proposed split of the combined UK operations. Should be more like 75% to 25% imho, perhaps Vodafone’s cable networks are not part of the combination but if so why are Vodafone promoting the potential to speed up broadband rollout as a benefit of such a merger???

https://money.usnews.com/investing/news/articles/2022-06-01/pfizer-to-exit-gsks-consumer-health-arm-after-spin-off

Very good lol, we need a little humour on a morning like this. :)

FT reports this morning that Energy Windfall Tax coming to UK electricity generators.
https://www.ft.com/content/ddbde592-a4e0-465a-9dd2-d6566790403f

https://www.reuters.com/markets/europe/vodafone-shareholder-e-will-consider-joint-investments-2022-05-20/

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.)

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.