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I agree re takeover being a remote possibility (hence the caveat in my wording) - Vodafone is way too big even for the largest PE houses to buy and forking £30bn would require a consortium of PE houses. Most likely scenario will be an acquisition by a peer (even that is remote) or Vodafone slimming down even further (perhaps selling Mpensa?) which would make the acquisition more palatable.
Nevertheless, I believe now we have bottomed out from a valuation perspective and I expect over the next few years Vodafone to produce fairly decent but unspectacular returns. I do have to say though that you should take my opinion with a grain of salt as i have always been a bullish on Voda (given sum of all parts valuation being lower than its individual businesses) which has resulted in me being early to the party with an average of around £1.
Namely - as Europe is overcoming recession, revenue will start growing quicker (with the added benefit of not wasting money keeping afloat section of the business that were underperforming i.e. Italy and Spain and releasing resources for additional investment where they earn their cost of capital), lower interest rates making debt burden easier to service, merger with three in the UK and overall more business friendly attitude by regulators and finally very cheap valuation which could result in a takeover deal.
Kev - buybacks haven't started, Italian asset not sold yet etc. You will not see an immediate impact on share price but rather a gradual one. The direction of travel will depend not on the buybacks as much as performance of the remaining assets. I think there are a couple of catalysts for Vodafone that could see it return to £1 of more.
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KenRow - hopefully the below will prove helpful in understanding buybacks. You can never tell if buybacks will result in share price appreciation as these depends on a host of other factors besides the buyback.
https://hbr.org/2001/04/is-a-share-buyback-right-for-your-company
Not sure why this is confusing? If there is a £1 offer for Vodafone, the trading price in LSE will also go to about that level (probably slightly lower given uncertainty re the transaction actually happening). Assuming you bought at £1.40 then you would be underwater. At this point you can sell and take the loss or keep your shares and wait for a number of scenarios to transpire.
This goes both ways - how can you question their assumptions re gas usage well into the second part of this century? As you said it's anyone guess as you can have a best case scenario were gas is still widely used as a supplementary source of energy or a worst case scenario were nuclear fusion comes out in ten years time and the entire O&G sector becomes obsolete almost overnight.
People keep saying that but the share price drop started early October and not just last week! Surely they could have put out a reassuring RNS two weeks ago when the share price was "only" 50% down from its September peak
Honestly just the African payments company should be worth as much as Vodafone's current entire MCAP. This is quite undervalued at this point and hopefully leadership can be bold in its pursue to unlock that value.
Not sure why they would cut the dividends if cash generation has remained at similar levels as in the past? The yield will decrease naturally as NAV and share price pick up.
Wow the directors actually recommended a 44p takeover proposal? That is shocking considering the performance of the company…
@H2Nick thanks for coming back on this. Indeed on a reported basis there is a small decrease but on an adjusted basis EPS is up approx. 10% (look at the EPS breakdown towards at the second half of the report).
Agreed re Revenue, that is why i also mentioned operating earnings as well which were quite ahead compared to 2021 (again you have to remember this is a mature to declining industry).
We definitely agree on the debt increasing being a negative - hopefully they can bring that down towards the lower end of their guidance range.
H2Nick - how did you arrive at the earnings flat assertion? BATS revenue grew by almost 8% while exiting Russia and Belarus (UK is not the only jurisdiction they sell into so comparing their revenue to the highest inflation rate in the G7 is not a good bench mark + costs also have an inflation element to them + really high inflation started mid way of 2022) and operating income grew by almost 3%. Not too bad for a company managing a steady decline in its industry.
Their debt profile is good and most of it is on fixed interest - you are right though that debt increasing is never good in this type of environment but as long as it supports growth its okay (which in a declining industry is difficult). I would be more comfortable with a lower debt figure for sure (i.e. sub £35bn or even £30bn).
For sure some negatives in there but on balance the results are pretty good and honestly I am quite surprised with the extremely negative market reaction.
Don't disagree with your comments but you have to balance all that with the fact that the SP has dropped by 50%+ from its peak. Its good to look at the macro environment but at the same time you need to see if the stock represents good value at current price (its probably fairly valued given all the negatives but at the same time buying it now could prove lucrative as things evolve).