Vodafone returns to annual growth for first time in eight years

https://www.theguardian.com/business/2016/may/17/vodafone-returns-annual-growth-first-time-eight-years-mobile-phone-operator

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Vodafone has returned to annual growth for the first time in eight years and has raised its dividend, after a programme to improve its networks paid off.

The mobile phone operator posted its first quarter of revenue growth in Europe since the end of 2010 after completing its project spring investment programme. It also saw strong performances in South Africa, Turkey and Egypt.

Vodafone has 46.8 million 4G customers in Europe after extending its next generation mobile networks to 87% 4G coverage, The coverage is below its 90% target owing to rollout delays in the UK and Germany, it said. In emerging markets, Vodafone has 72.5 million 3G users.

Vittorio Colao, the chief executive, said the multibillion-pound investment programme had transformed the quality of the group’s technology. “This has been a year of strong execution for the group, returning to organic growth in both revenue and EBITDA for the first time since 2008,” he said. “I am confident we will sustain our positive momentum in the coming year.”

Vodafone posted a 2.7% rise in earnings before interest, tax, depreciation and amortisation to £11.6bn in the year to 31 March. It predicted a further rise in profits to between £12.4bn and £12.8bn this year. Revenues increased 2.3% to £41bn last year.

Revenue from Europe grew 0.5% in the fourth quarter as two of Vodafone’s biggest markets, Germany and Italy, returned to growth.

However, Vodafone’s performance is still lagging in the UK, where it has rolled out a broadband service but has yet to launch its TV platform. Customer complaints have soared in Britain after the group introduced a new billing system. It has become the most complained-about mobile phone provider, with customer grievances rising to 32 per 100,000 contract customers in the last three months of 2015 despite a £2bn investment to improve its UK network and services.

The shares rose 2.4% to 228.95p on Tuesday. Vodafone raised its full-year dividend by 2% to 11.45p. Russ Mould, investment director at AJ Bell, said this was a pleasant surprise.

“This means Vodafone is one of 26 FTSE 100 firms to have increased its shareholder distribution in each of the last 10 years.,” he added.