14th May 2019 07:47
LONDON (Alliance News) - Vodafone Group PLC cut its dividend by 40% on Tuesday as it swung to an annual loss, while it is also set to unveil 5G across the UK.
Vodafone has returned a final dividend of 4.16 euro cents for the 12 months to March 31, taking the year's total to 9.00 cents, down 40%. In its prior year, Vodafone paid 15.07 cents, and consensus had been for a cut to 15 cents.
"The group is at a key point of transformation - deepening customer engagement, accelerating digital transformation, radically simplifying our operations, generating better returns from our infrastructure assets and continuing to optimise our portfolio," said Chief Executive Nick Read.
"To support these goals and to rebuild headroom, the board has made the decision to rebase the dividend, helping us to reduce debt and delever to the low end of our target range in the next few years."
Vodafone's 5G is to go live in seven cities on July 3 in the UK, and then 12 others by the end of 2019. It is also to start in Germany, Italy, and Spain during the summer, making Vodafone the first company to offer 5G in four countries.
The initial cities are in the UK are London, Manchester, Liverpool, Birmingham, Bristol, Cardiff, and Glasgow, to be followed later by places such as Southampton, Bournemouth, and Wolverhampton.
Prices will be the same for both consumers and businesses, Vodafone said.
"This is important. It means we can today announce the largest launch of 5G in the UK and be the first to announce 5G roaming," said Vodafone UK Chief Executive Nick Jeffery.
"It means UK businesses can lead the world in adopting 5G to boost productivity and attract investment. It means consumers can get the fastest mobile speeds ever, and it means our public sector will be able to adopt new services to improve healthcare, social services and housing."
Turning back to annual figures, Vodafone's loss from continuing operations for the 12 months to March was EUR4.11 billion, after a EUR4.76 billion profit the year before.
During the year, Vodafone booked a loss on the sale of Vodafone India, as well as EUR3.50 billion in impairments as announced back in November.
Vodafone's revenue slipped 6.2% to EUR43.67 billion, with the company adopting the IFRS 15 accounting standard compared to IFRS 18 previously.
This, alongside foreign exchange headwinds and the sale of Vodafone Qatar, hampered revenue growth, it said.
The revenue figure compares to analyst consensus of revenue of EUR45.15 billion.
Vodafone's service revenue, which makes up the large majority of the overall figure, fell 4.5% to EUR39.22 billion, but increased 0.3% organically.
Vodafone swung to a total loss of EUR7.64 billion from a profit of EUR2.79 billion the year prior. From continuing operations, the loss was EUR4.11 billion from a EUR4.76 billion profit.
Vodafone's adjusted earnings before interest, tax, depreciation, and amortisation declined 4.1% to EUR13.92 billion, and fell 0.5% organically. On an underlying basis, growth was 3.1%, in line with guidance of "around" 3%.
Looking ahead, Vodafone sees adjusted Ebitda between EUR13.8 billion and EUR14.2 billion for its newly begun year, implying growth in the low single-digits.
Free cash flow pre-spectrum is guided at a minimum of EUR5.4 billion, having posted EUR5.5 billion in the recently ended year.
"We are making strong progress on the priorities I described in November, supporting our outlook for Ebitda growth in financial 2020, with improving momentum in the second half," added Read.
"Together with the strategic and financial benefits of the Liberty Global transaction, which we expect to close in July, this underpins our ambition to grow free cash flow and improve shareholder returns going forwards."
Vodafone, in a deal first announced May last year, is buying EUR18.4 billion worth of assets from Liberty Global.
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