Member Info for mole_man99

Why is this transformative year different to the 10 that have gone before it?

I seem to remember them having a similar plan, VOD 2016 they called it or something. Cut cost, reduce staff, sell assets, to keep paying div.

Didn’t really work then.

There always was. Being allowed to dig up clontibret to get at it is the unknown.

No plan for a mine, no interest here.

Expect a bumpy ride. VOD is likely to suffer in the coming us debt ceiling liquidity drain. Big money will be selling and avoiding div only stocks in favour of loading up on the trillion dollars of t-bills about to be unleashed.

The comments not so fun!

Well OK, everyone who bought since Oct 2011 is underwater including divs, and a gaggle of folk who bought from Sept 1999 to Sept 2000.

Divs that don't come from genuinely excess capital don't work.

"It's only a dog of you timed your entry wrong"

So everyone who has bought since Nov 1997?

Probably why all of them have made poor market lagging returns last 20 years including divs. Too much debt is a bad thing. Paying divs instead of paying off your debt is bad for investors long term, they just can't see it, or don't want to.

The debt is just a big anchor now that is forcing them to do things the market clearly does not like.

Selling prime assets and shrinking market share with a JV that only exists as they can’t make necessary investments on their own, due to too much debt already.

I'm curious, after 3 years of me droning on here about debt and divs, do long term believers still think paying out divs and doing buybacks is a good strategy for the cash is does generate?

This seems to still be the strategy. How long does it fail for before it changes? 10 year total return including dividends is -11%.

The market will pay for growth and NVDA has an eye watering amount of it. VOD does not, hence the valuations.

VOD are issuing €1.5bn new notes to pay off max 325m USD. Debt reduction does not appear to be a thing.

Waiting for update on issues to do with the hybrid euro bond to recycle.

It’s all so 2009. Collecting a div while you wait for recovery in London property market.

WKP was a safe place to wait last time and remain well managed to do it again, with a resilient trading model and no carbuncle buildings on the books to drag them under.

Bond issuers pay a fixed coupon rate, not an interest rate which can vary as set by the lender. It is what it is.

Actual coupons were issued to bond holders in ye oldie times, hence the term.

They are issuing new sterling and euro notes to pay for it, so you won’t see a full cash flow interest saving.

How many and what coupon will be revealed after the auction.

The final goal is to reduce €10bn hybrid notes by up to 10%.

The big city buyers are more concerned with cash flows to put into the discounted cash flow models, and in this respect Vodafone are guiding to lower cash flows in 2024. That is probably what worried them and outweighed any decline in net debt.

If cash flow becomes an issue then the cash in the bank can decline rapidly which will lead to an increase in net debt. They still carry total debt commitments to €66bn.

Oh lordy, more first timers filling their ISA allocation based purely on a 'safe' dividend and the no brainer fact it has to go up.

Take care. There was much to worry about in the report.

Only from selling key assets which you can only do once. Take that out and operating margin is falling., and now they have to rent their own tower network in Germany, which is falling in operating terms.

Still €66bn of debt left including leases, the interest payable on thse having risen.

The merger with 3 is not a good sign. It is a sign that the company is now too financially weak to fund its own 5g investment program, so it must give away a portion of its uk market share to a rival.

Selling towers is a bad sign, as is getting into bed with a minority shareholder. You can see the market reaction to that.

Time to wake up and admit sucking a div out is not best for the company.

It will not be big gainer for the sp at least initially. Assets and some debt will come off the balance sheet, then a smaller share of the uk market will go back on. It will shrink the company, not expand it.
The market will want to see if it leads to increased earnings in uk before assigning more value to it.
Just as with towers it won’t unlock any value. Just gets vod out of some essential cap ex by getting 3 to do 49% of it.
JV’s also have a habit of falling apart, so city will be sceptical at first.

It’s a very drawn out crash for sure Dan. More of an elongated slump. Today is fed rates day and the markets expect 0.25% and the fed to say they will pause raising rates further. If they don’t say that then stocks will suffer, again, for the near term.

Their offer price would only need to match highest price paid by them in previous 12 months. If they wait till Sept they only need to offer 110p. Would you take it?
Probably not. VOD can't be taken over at these levels as holders won't accept a realistic price, and buyers won't offer what holders think it's worth.
Now with Marg at the helm it seems unlikely the div will be cancelled so the asset drain will continue so those divs can get paid. It is 'untakoverable'.