Skip to main content
The Markets by Proactive
Go to Proactive UK
Proactive UK has moved. Proactive’s coverage of London’s small caps continues on proactiveinvestors.com Go there →
Advertisement
The Markets
by Proactive
Proactive UK has moved.
Coverage of London’s small caps continues on proactiveinvestors.com
Go to Proactive UK
The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
Go to Proactive UK
Advertisement
The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
Go to Proactive UK

Telecoms

Vodafone's first-quarter update could show evidence of German turnaround

Vodafone Group PLC (LSE:VOD) reports first-quarter results next Thursday, 24 July, which will allow investors to check on the progress of the telecoms group's Germany turnaround.

At its final results in May, the FTSE 100 company said it expected the coming year to see "broad-based momentum" across Europe and Africa, with Germany returning to top-line growth.

Vodafone's group outlook for the coming year is for a 2% increase in underlying earnings and a 5% improvement in free cash flow.

Last year, Germany service revenue declined 5.0%, impacted by regulatory changes, or 2.0% if excluding this factor, while UK organic service revenue growth rose 1.9%.

Since then, the merger with Three UK was completed last month, which is expected to result in annual 'synergies' of £700 million by the fifth year.

Group chief executive Margherita Della Valle said that transaction, which came after disposals of Italian and Spanish businesses, as well as its a spin-off of its mobile towers unit, "completes the reshaping of Vodafone in Europe" are means it is "well-positioned for growth ahead".

With all that in mind, including Della Valle being joined by a new finance chief from Microsoft, some analysts have been reappraising Vodafone's prospects.

Deutsche Bank said the group appeared to be turning a corner after a run of missteps in previous years, highlighting what it sees as an undemanding valuation.

However, the analysts noted that the Three UK merger is initially expected to reduce free cash flow by £170 million before restructuring delivers benefits, while volatility in emerging market currencies and ongoing challenges in Germany were predicted to weigh on results until 2027.

Advertisement
The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
Go to Proactive UK