Vodafone swung back into the black in the last financial year, the telecoms giant revealed this morning, posting a profit of €536m (£460m).
The firm said that it had successfully completed the first phase of its plans to reshape the business, and had been buoyed by an especially good performance in Germany.
However, the firm missed analyst expectations for its earnings, sending the FTSE 100 firm’s shares down 5.8 per cent to 133p this afternoon.
Group revenue declined by 2.6 per cent to €43.8bn, with the impact of Covid-19 on roaming and visitor revenue offsetting benefits from the acquisition of Liberty Global’s assets in Germany.
But operating profit rose 24.3 per cent to €5.1bn, up from €4.1bn last year.
Vodafone said it would give a final divided of 4.5 cents, taking full year payouts to 9 cents, in line with 2020’s scheme.
Group chief executive Nick Read said: “We have delivered on the first phase of our strategy to reshape Vodafone as a stronger connectivity provider – including the simplification of the group to Europe and Africa, the successful IPO of Vantage Towers (€13.2bn market capitalisation), the fast roll out of our next generation mobile and fixed networks, share gain in broadband subscriptions and continued reduction in customer churn.”
He added that the transformation programme had entailed savings of €500m.
“The world has changed”, Read added. “The pandemic has shown how critical connectivity and digital services are to society.
“Vodafone is strongly positioned and through increased investment, we are taking action now to ensure we play a leadership role and capture the opportunities that these changes create.”
Richard Flood, investment manager at Brewin Dolphin, said: “Vodafone’s results are slightly behind the market’s expectations, with lockdown in Europe still partly to blame.
“Although not a company to set the heart racing with excitement, Vodafone can continue to grow slowly and has a very attractive and well covered dividend, which is currently yielding 5.7 per cent.”