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The price is going to keep decreasing because the big boys are avoiding VOD - now is the time for value investors and retail investors if you can find the bottom. To be honest, the enterprise value is already super low so the share price will only soar once the big boys join the game.
A share buyback for £1.8bn (10% of share capital max as authorised at 2023 AGM) seems sensible. It would reduce total dividends paid (c.£200m/year) while increasing EPS (due to reduced share capital), and thereby increase dividend cover to 1.7 (new EPS/dividend per share). Even Luka (CFO) alluded quite strongly to a buyback during Q&A - he just needs a bit of time to get comfortable around a sustainable dividend + capex. Remember he did 2 share buybacks in SAP and both times share price went up > 50%, so he knows what he's doing if a buyback happens. He may have to cut dividend per share because the cost of equity is too high (c.12% dividend yield) vs. cost of debt of 2.5%, but this would further increase dividend cover above 2. I'm willing to take a haircut on the dividend, and increase it 5-10% each year. After all, c.40% of CEO and CFO's remuneration is in shares, so they have an incentive to get this share price back up(e.g. MDV's average SP on previous share awards was 120p).
Once that is all done, VOD is sorted from a equity and debt front, and they can then turn their focus to pushing up the revenue line, whilst turning their shared operation cost centre into a profit centre (like charging Zegona £110m for Vodafone Spain, and I suspect the same for Vodafone Italy if a deal is struck).
Futher potential upside: Vodafone-Three merger, IoT business, shared operation cost centre, ORAN, Vodacom, Vodafone Italy, possible takeover (if Illiad is willing to pay €11bn for Vodafone Italy, I'm pretty sure they could partner with a PE fund to buy VOD at £18bn and sell its parts)
I look forward to the May FY results. We're in for a ride, but the destination is going to be very sweet because you could sell parts of VOD now, or VOD gets taken over (for very cheap), and we'll still win at the current price.
Great CFO (now CEO) - 2.5% fixed interest rate. majority of debt payable from 2030 onwards. £11bn liquidity yielding 5% interest rate. Spectrum investment pretty much done - time to reap 5G profits on 2.5% cost of debt (especially in Africa where laying fibre is financially impossible). Waiting for share buyback on Spain proceeds to reduce 11.5% cost of equity. Dividend expected to be maintained looking at adjusted FCF (or just cut some of the enormous capex). Not the healthiest business but the SP is wildly off fundamentals.
Electorate would rather bring in fossil fuel/gas from Russia/overseas than fuel from England....old world thinking...
Good policy is normally unpopular. Bad politicians just go the easy route, but good politicians make difficult policies popular. Let's see what the Welsh government is made of....
From September 2021 Consultation of Planning for new energy infrastructure - Draft Overarching National Policy Statement for Energy (applicable to both England and Wales)
3.3.45 Other novel technologies or processes may emerge during the life of this NPS, which
are nationally significant and can help deliver our energy objectives. Where these
contribute towards our objectives, such contribution should be given substantial
weight.
The role of combustion power stations
3.3.32 Combustion power stations use fuel for generation. This means that it is possible for
them to provide dispatchable generation when the output from intermittent renewables
is low but they are dependent on the supply of fuel for generation. Most forms of
combustion power also produce residual emissions, and where this is the case their
use will need to be limited over time unless they can decarbonise. All commercial
scale (at or over 300 MW) combustion power stations fuelled by gas, coal, oil or
biomass have to be constructed Carbon Capture Ready (CCR). More information on
Government policy on the CCR requirements is set out in Section 4.829.
3.3.33 Energy from Waste (EfW) plants operate at 90%+ availability but also produce residual
carbon emissions. The principal purpose of the combustion of waste, or similar
processes (for example Advanced Conversion Technologies (ACTs) such as pyrolysis
or gasification) is to reduce the amount of waste going to landfill in accordance with
the Waste Hierarchy30 and to recover energy from that waste as electricity or heat.
Only waste that cannot be re-used or recycled with less environmental impact and
would otherwise go to landfill should be used for energy recovery. Energy recovery
from residual waste has a lower GHG impact than landfill31. The amount of electricity
that can be generated from EfW is constrained by the availability of its feedstock,
which is set to reduce further by 2035 as a result of government policy32.
Gov recognises need to deal with non-recycleable waste (subcoal). Wales Moratorium trying to get recycling rates up (i.e. policy intention doesn't deal with non-recycleables).
Wondering if anyone knew who New Tech Cap Group (NTCG) is?
Top 10 shareholders are all institutional or 'near institutional/not small frys', but can't determine who NTCG is affiliated to (behind the LLC corporate veil).
With the recent/upcoming investment (which is c. half of the current market cap £12m vs. £24m), they either know something I don't, or they are not the smartest/super risky investors around....
FT article - The EU’s biomass dilemma: can burning trees ever be green?
Bio-energy/subcoal - yes or no?
https://www.ft.com/content/c3b00115-562e-4d06-bd11-f46a3f9366b1