Vodafone is leading the FTSE 100 this morning, with its share price up four per cent in mid-morning trading as it begins to show signs of recovery in Europe.
The phone giant had an improved, but still not stellar, three months to 30 June. Reported group revenues fell 0.9 per cent to £10.1m, though organic revenues rose 3.3 per cent.
Reporter group service revenues also dropped, by 2.9 per cent.
Europe was the biggest headache for the business, with reported revenues dropping 6.2 per cent, while Amap (Africa, the Middle East and Asia Pacific) was the one area of growth, up four per cent in reported terms.
While European figures were still down, Vodafone said it had made a “continued recovery”: the UK grew by 0.2 per cent, while declines in Germany, Italy and Spain were at lower levels than previous (down 1.2 per cent, two per cent and 5.5 per cent respectively).
The previous quarter those declines stood at 3.5 per cent, 4.1 per cent and 7.8 per cent, while the UK also experienced a fall of 0.6 per cent.
Why it's interesting:
The mobile market is going through something of a shift, as we saw with the death of Phones4U last year.
There ie less “contract churn” across all major markets, Vodafone noted – previously a key source of growth – but instead data usage is growing “significantly”, with 18.9m customers using 4G in Europe now.
What they said:
Chief executive Vittorio Colao said: “We have made a good start to the year. Our emerging markets have maintained their strong momentum and more of our European businesses are returning to growth, as customer demand for 4G and data takes off.
“We continue to hit our Project Spring build milestones and customers are beginning to value the improvement in service that is resulting: contract churn in Europe is now falling and mobile ARPU trends are stabilising in a number of key markets.
“Our other key growth areas - unified communications and enterprise - are performing strongly, benefiting from the increased capabilities and footprint that our higher levels of investment are delivering. However, our markets are, as always, highly competitive and we therefore have to remain very focused on efficiency, cost control, and excellent value and service to customers, while continuing to deliver a good return for shareholders."
Vodafone is still investing heavily in the company, particularly through its Project Spring initiative. Trading in the first quarter was in line with expectations and Vodafone is so far on track to meet expectations for 2016 financial year.