Business Watch: Vodafone results

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Vodafone UK leads turnaround in Vodafone fortunes as fire-sale of non-core assets continues

Vodafone UK has continued its turnaround, according to its interim results.

Revenue was up 2.9 per cent in the six months to September, the best performance of Vodafone’s European businesses, all of which saw revenue declines besides Germany.

And profits were up too, the only Vodafone Europe business able to make that boast.

Chief executive Vittorio Colao (pictured) put the strong UK figures down to contract customer growth, better churn management, improved average revenues per user and expanded indirect distribution channels.

There was also the helpful fact that the previous year revenues took a kick from termination rate reductions imposed by the regulator, but it was nevertheless a good performance after a few decidedly thin years at Vodafone UK.

Meanwhile, Colao repeated his determination to “release liquidity from all our non-core assets” as he upgraded the Vodafone group’s full-year profit expectations.

Colao said: “We have a strategy to realise further value from non-controlled assets, take full advantage of the most valuable telecoms growth opportunities ahead and which will deliver sustainable revenue growth, stabilising margins and strong free cash flows.”

He responded to frustrated investors by selling Vodafone’s interest in Japan’s Softbank, which was a hangover from the £8.9 billion sale of Vodafone Japan in 2006.

The Softbank sale followed the disposal of Vodafone’s 3.2 per cent stake in China Mobile for £4.3 bllion and the creation of a special ‘value-creation’ arm to manage all of Vodafone’s remaining minorities, including its 45 per cent stake in US mobile operator Verizon Wireless and its 44 per cent stake in French mobile operator SFR. It’s possible that more big disposals are on the cards for Vodafone in 2012.

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