Member Info for meshtrader

Mole, you realise amortisation and depreciation for the period was almost 14bn? This figure is subtracted from operating profit used for FCF.

Mole

FCF = net operating profit - capital expenditure; per definition, no, dividends and other financing activities won't be covered in this metric.

FCF can be misleading as amortisation and depreciation is baked into net operating profit. Best to review the cash flow statement and to monitor debt levels as a result of financing acitivites segment in this statement.

Total movement of cash include any dividends paid and received.

"Real revenue down. Impact of contract rises on customer churn yet to appear. Plan to dilute share of UK market, the one Europe area that is growing. Low real cash flow (the one not fiddled with)."

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And where did you read the FCF is down? And where did you read about customer churn?

Its clear from Ericsson and Nokia results that oerpators are driving a hard bargain to reduce their input costs 😉

"If it was down to me, Id' drop the dividend and announce a buyback program starting immediately. The share price is around 25 year lows, going off Google charts, and a drop in the share price on the back of a dividend cut would mean they could mop up significant stock. They could reinstate the dividends after a couple of years with significantly less shares in issue."

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You can also look at it from another angle, ca 1.2bn will be paid out to shareholders in early august. If all were to re-invest this net amount, it would represent more than 5% of the current market cap! This act alone would catapult the shares upward.

Fleccy, indeed, we have all underlined in the past the importance of a solid and consistent ownership to ensure the longevity of homegrown businesses and ecosystem. Just by narrowing it down to telcos, simply look at Swisscom, Orange and Deutsche. All three have solid in-country large institutional shareholder backing. Critical in drawing a line in the sand.

What institutional investors are doing to FTSE listed companies is akin to parents dissing their own children in favour of neighbour's. I opine there should be a law demanding a minimum investment in UK markets. After all, pension funds are managing the 'income" from the same FTSE employees, whose livelihood is highly correlated to their employers' ability to perform in the markets.

Here is the link to the full article. In my opinion, the lack of institutional backing is the main driving factor behind the significant underperformance of UK stocks.

https://www.fool.co.uk/2023/06/29/why-the-ftse-100-has-been-a-flop-in-2023/

"In the late 1990s, UK pension funds and insurance companies owned more than half of UK stocks. Over the past 25 years, these asset managers have de-risked by selling stocks to buy safer bonds. Hence, their ownership of UK stocks has crashed to 4% today.

In summary, the FTSE 100 has missed out by miles on the rally in global stocks. But this has left it incredibly cheap, both in historic and geographical terms. And that’s why I keep on buying cheap UK shares!"

The seem to be attracting C rated analysts. Who the hell wants to work fo no commission?

https://www.efinancialcareers.nl/news/2023/03/leaving-berenberg

So basically, a banker who is himself underperforming is readily parting advice as to how to make money. You couln't make this stuff up 😂

"Debt is coming down and persistent inflation isn’t an issue here as mobile contracts allow for it across all providers. Customer retention is the danger zone here but VF has the strongest network and brand to mitigate imo. Moving provider is pretty pointless and hassle."

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It's a rising sea so prices are all very similar across providers and as you say, its all about reputation, level of service and the overall customer experience.

As for CX, Vodafone is leading the pack in the digital customer experience enhancement. Our (yes, our, because I am a shareholder) google tech collaboration is rather advanced to ensure a much seamless and integrated experience as AI and various data platform advance and converge. You will see the different vividly very soon.

I am inclined to argue that soon Vod will easily justify asking for a premium to allow consumers accessing its network.

Looks like BT is being sold in favour of Vod today

"Forward p/E is where the market base the next set of results to be - much much higher"

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Earnings are always subject to a lot of shenanigans as it can easily be fudged to look good. What you should pay attention to is the FCF. On paper a company can come across as profitable, but no cash coming in. You want good examples, look at Enron, GE, Wirecard etc.

FCF alongside sustained investment into R&D as at times a boost to FCF can be achieved at the expense of R&D cuts. Another is M2M of assets to ensure a true reflection of recorded asset values.

Again, I challenge you to list global companies with similar FCF multiple as vod. Indeed, you will quickly see BP and Shell are other examples where their cash engine monster isn't being valued as it should - The FTSE100 omen and the Brexit gift.

Lol this stake would have been worth €7bn today. Instead the BOD opted for the disastrous Indian stew with the massive bitter after taste and much indigestion.

https://www.ft.com/content/d0182252-8f31-11db-9ba3-0000779e2340

"Worries that VOD’s possible new bedfellows known as “Three (3)” have major Chinese links spook the markets. "

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Nothing to see here and if true, only goes to show the incompetence of such MPs. 3 has been operating in the uk for over 20 years and no one complained. Of course they have Chinese links, its a fricking Hong Kong Chinese based company.

"I’d say you’re buying a debt mountain on a 10x PE which is basically crazy expensive for that risk. "

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You mean a forward Free Cash Flow of ca4x lol?

The inherent business model of telcos is no different to utilities, you need to make capital investments before turning a profit. Unlike other telcos, Vod is actively creating new businesses such as Mpesa and DAB with a different operating model requiring significantly less capital.

As has been said multiple times in the past, Vod is the least leveraged major telco in the world.

No need to invest in vod if you don't believe it, but no need to be deceitful.

Vod is definitely more active, marketing wise, than Deutsche Telekom, Orange and Telefonica.

"Divi cancelled or at least cut its a never ending disaster."

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Lol where are you guys coming from?

Shame there is zero active moderation on these boards to ensure fact checking. I am all for diverse viewpoints and debates, but this sort of stuff is blatant deceitful commenting and posting, which only serves to devalue any credibility of these forums, if there was any to begin with.

If you can't stomach volatility in your investing/trading, then stay way clear of such activities. Like professional racers, evaluate your risk/reward before you head off, knowing injuries and potential death is a likely outcome of your activities.

Android,

Always funny to read " analysts' projections, which are typically a follow a herd mentality mindset to ensure they are all either right or wrong.

Most surprising is their projection on revenue, where they are anticipating a drop by ca 5%. Likely an adjustment to sold off entities, but what about price inflation and growth of new products? I.e. they are projecting revenues to be flatlining around 43bn for the next two years. How is that possible in a scenario of above inflation price hikes of 10%+, both on the commercial as well as private side of the business. Just look at Vodafone's performance in turkey. Europe will follow suit given the rampant inflation.

In a similar vein, they are also anticipating debt to grow, why?

All it takes for the telcos to take off, and vod in particular, is when the dumb money realises A.I. needs a proper platform to flourish and to achieve the scale distribution its craving. As per previous post, Vod's DAB platform is a game changer and only a matter of time before everyone jumps on to ride it out. Couple this with the prospects of integrating it with digital payment platforms such Mpesa.

It's clear that traditional telco analysts are looking through things via a legacy lens through which to make predictions and to price assets accordingly. A shift is on the way as new technologies are converging and these legacy analysts will be a thing of past, when replaced by algo analysts who are better equipped to connect the current dots.

PS "same" analysts want you buy Nvidia and Tesla at current levels

This could really be a massive and lucrative business - It's like Amazon or Ebay but for connected devices. Only if vod was a pure american company - it would be trading at 500bn+ by now.

https://www.telecomtv.com/content/digital-platforms-services/is-the-economy-of-things-a-new-telco-revenue-opportunity-vodafone-thinks-so-47628/

This is brilliant! https://www.vdigitalassetbroker.com/

"But probably most of the market red after that inflation shocker "

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Good for those who can afford sitting on debt as money loses value. As for VOD, higher inflation leads to real value of net debt dropping. Again, pundits are missing the elephant in the room; Vod's issued bonds have fixed rates attached to them, while they can adjust their prices in tandem and above the rate of inflation. What all this mean is more cash poring in and less expenses to be paid, especially now that they are laying off portion of the workforce.