Vodafone Share Discussion Threads

[isis] 18/11/2024 13:50

I see no problem with buybacks if the shares look cheap as they do here. I'm sure they run the numbers and don't just do it willy nilly. They have shares and options too.

[diku] 18/11/2024 13:41

They get paid for because resolutions get passed by 99% every time...once a year they give a chance to play noughts and crosses on the ballot papers...VOD and buybacks is like a permanent attachment...directors come and go if there is a merry go round doors...

[nemesis6] 18/11/2024 11:25

What the hell do these "directors" get paid for?????

[spacedust] 18/11/2024 10:37

Money down the drain. 4bn plus 3bn. 7bn could've been used to reduce debts to 13bn.

[davius] 17/11/2024 11:07

A valid question.

It looks like the relative TSR is the only one that relates to the share price (and dividends) that might be affected by the buy backs.

It doesn't appear to be helping a great deal yet, though there's still €3bn odd of buybacks to go I think.

[sigmund freud] 16/11/2024 16:08

I would value any interpretation of the buyback effects upon the directors' remuneration policy. A company using its cash to issue buybacks when the share price is falling is of concern to me. Agree that the best use of cash is to pay down debt in a low growth company, especially in a time of uncertainty about medium term interest rates.

Buybacks in this situation might be an attempt to manipulate the share price, when actually cash should be used for the benefit of the company. And pay out dividends from leftovers.

This raises concern to me about potential influence upon company strategy to line one's own pocket, or as I prefer to say, snouts in the trough time. They fork out £140k for a so-called independent remuneration committee.

Having worked in the NHS a long time, I never doubt the ability of those at the top to get rewarded for complete failure. Often these rewards are granted by people who the beneficiary knows, lunches with, and at times has extramarital relations with.

The following is an extract of the company report starting on p98, it is probably easier to read there than my cut & paste

hxxps://reports.investors.vodafone.com/view/197179846/98/Fixed pay

Are those at the top benefitting from the buybacks? If not that's fine, I will take my paranoia elsewhere. It is the impact on "adjusted" FCF and EBITA that I can't work out.

Base salary
Effective 27 April 2023:
Group Chief Executive: £1,250,000.

Effective 1 July 2024:
Group Chief Executive: £1,250,000 (no increase).

Travel related benefits and private medical cover.

Benefits
Pension
Annual bonus

Short term incentive plan
Opportunity (% of salary):
Target: 100%/Maximum: 200%
Measures:
Opportunity (% of salary):
Target: 100%/Maximum: 200%
Measures:
Service revenue (20%), adjusted EBIT (20%), adjusted FCF
(20%), revenue market share (10%), Net Promoter Score
(20%) and churn (10%).

Long term incentive plan
Opportunity (% of salary – maximum):
Chief Executive: 500%/Other Executive Directors: 450%
Measures:
Adjusted free cash flow (60%), relative TSR (30%),
and ESG (10%).
Performance/holding periods:
Three-year performance + two-year holding period.
Service revenue (20%), adjusted EBIT (20%), adjusted FCF
(20%), revenue market share (10%), Net Promoter Score
(20%) and churn (10%).
Opportunity (% of salary – maximum):
Chief Executive: 500%/Other Executive Directors: 450%
Measures:
Adjusted free cash flow (60%), relative TSR (30%),
and ESG (10%).
Performance/holding periods:
Three-year performance + two-year holding period.

[isis] 15/11/2024 22:19

Spoons very busy down my way yesterday and I'm sure they will be all Weekend. Lot's of people were tucking in the new Xmas stuff and Decorations but not Trees were up everywhere.
It was also encouraging to see a Posse of Indians (the Asian kind) tucking into the Curry Night and thoroughly enjoying it. That must be a bit of compliment to Spoons Curries I would say. I had Fish n Chips though. ;-))

[isis] 15/11/2024 21:57

Does anyone know why Vodafone are holding so many shares in Treasury?

Vodafone intends to hold the purchased shares in treasury. Following the purchase of these shares, Vodafone holds 2,238,843,995 of its ordinary shares in treasury and has 25,969,100,822 ordinary shares in issue (excluding treasury shares).14 hours ago

[xtrmntr] 15/11/2024 18:55

The main news from Vodafone's (VOD) results is that the approval processes for their transactions in the UK and Italy are "nearing conclusion". In most other respects, the figures show no change from the recent past, which has been characterised by slow growth and an underperforming German business. In Italy, Vodafone is selling its business to Swisscom AG for €8bn (£6.67bn) in upfront cash and completion is now expected in early 2025. At a similar time, Vodafone is also expecting to complete its merger with Three UK. This deal includes a promise to invest £11bn in 5G infrastructure. The Competition and Markets Authority said last week the tie-up could proceed if this commitment is met.The scale of investment needed and the intensity of competition has been a sticking point for telecoms companies. The combination has made it difficult to generate returns on investment but the aim with the Three UK merger is that by increasing its scale Vodafone can spread the costs across more customers, increasing the returns to 5G investment.Focusing on the UK seems sensible as it is one of its best performing markets. In the six months to September, revenue increased 2.1 per cent year-on-year to €3.44bn while adjusted cash profit rose 10.5 per cent. This was partly the result of foreign exchange movements, but also because of lower energy costs and 'other cost efficiencies'. These efficiencies should grow if and when the Three merger is completed.The problem market has been Germany. It makes up over a third of revenue but saw revenue decline 3.9 per cent. In part, this fall was because of a law change that stops landlords from bundling cable TV into mandatory tenancy charges, but even without that, service revenue was down 2.4 per cent in the second quarter.In fact, price increases last year have continued to drive German customers away. In the half year, the broadband customer base declined by 88,000. In response, Vodafone has already said it is laying off 3,100 workers, a sign it doesn't expect growth to pick up again soon.The consequence is that there was a free cash outflow of €1.1bn as capital spending crept up slightly to €3bn. It is anticipation of this outflow that caused Vodafone to slash its dividend earlier this year, meaning its yield fell from 11 per cent to 6 per cent.There is a chance that once these deals go through Vodafone will be able to return to profitable growth. But the last six months have just been more of the same and until we see evidence of change, we stick to hold.

[diku] 15/11/2024 18:50

VOD and buybacks are like permanently attached...a bit like DFS and never ending Sale...

[davius] 15/11/2024 14:22

Previous buy backs were carried out to to reduce shares in issue by the same number as being increased via convertible loan notes expiring and being converted into new shares. The latest €4bn (eventually) buy backs are designed to reduce the number of shares in circulation, thereby increasing the proportion of the business each share owns. This arguably leads to increased EPS and dividends, though rarely has a short term positive effect.

[1carus] 15/11/2024 12:25

Maybe they think it is better to buy cheap shares before increasing the share price. Hopefully this is the case and they have been rolling up the kitchen sink in bad news in reported numbers/costs etc. Its still a huge company, and if it the model turns even slightly in it's favour there is still much value to have here. BT and VOD are such a large part of the infrastructure here, they can't collude, but the evidence suggests that the pricing model is out of balance in providing the services that they do. It is in everyones interest that telecoms companies here in the UK are allowed to prosper.

[laurence llewelyn binliner] 15/11/2024 10:49

11.11.2024 - the Board is targeting a full year dividend of 4.5 euro cents per share for FY25, with an ambition to grow it over time..

So far in FY25 an initial tranche of EURO500M of share buybacks was completed on 6 August 2024 resulting in the repurchase of 591 million shares. A second tranche of 500M of shares buybacks commenced on 7 August 2024 and is expected to complete in November 2024. It is expected that the commencement of the 3rd tranche of 500M of share buybacks will be announced shortly thereafter..

The Board anticipates the opportunity for further share buybacks of up to EURO2.0BN following the completion of the sale of Vodafone Italy which is expected to occur in
early 2025..

The company has been busy buying this week, daily volumes of 15/20M shares bought..

CMA VOD/3 merger FID by 07.12.2024..

[simon8] 15/11/2024 10:07

Completely agree, I have a number of FTSE in my portfolio all with major debt piles who for some reason think the way to go is buybacks, not in one case has that fed through to the share price, in fact they are all on a southerly direction much like vod. Pay the debt down and save the interest payments... it's basic economics... reduce debt and free up further cash to pay down more debt by reducing interest payments on debt paid down... why can't these CFOs get the basics... perhaps they should be sacked!

[isis] 15/11/2024 01:14

Yeah but look at the Banks -
Do what ya Brain says not analyst Bolox

[diku] 14/11/2024 22:44

All these lower of price targets...100p is becoming rear view mirror...another FTSE company probably never see 100p again...or not for good while...Lloy is another...

[whitehunter] 14/11/2024 19:32

I hold shares in at least 4 companies doing buybacks and there has been zero value to me as a holder on any of these companies. I consider it to be a complete waste of money when nearly all these companies are debt burdened. To me the people deciding that is the best thing they can do (with vast amounts of cash in Vodafone’s case) are devoid of vision and should be sent packing.

[justiceforthemany] 14/11/2024 13:12

Progressive dividend growth was also mentioned in the report this week.

[philanderer] 14/11/2024 10:47

DZ Bank cuts fair value for Vodafone to 70 (75) pence - 'hold'

[dplewis1] 14/11/2024 10:31

Yes I read the same. They've ditched GS and gone with Citi this time (think the first one was MS) so I guess they are keeping their syndicate banks happy. I disagree that buybacks are a waste of time - the CFO has a number of tools at his disposal, once the debt/ebitda ratios are on target he can either increase divi or do a buyback to return money to shareholders. Buybacks are good as they can be scaled up or down quickly

[davius] 14/11/2024 09:26

I believe this marks the third 500m buyback, with one more to go which will start after this one completes early 2025. Then of course after the Italy sale completes they'll be another 2bn of buybacks through next year and probably into 2026.

On completion shares in issue should be 15-20% lower, the dividend thus 5.4c (up from 4.5c) with the yield at 69p being 6.5%.

[nilla159] 14/11/2024 09:17

Share Buybacks are the Greatest waste of shareholders monies Known to investing.
These incompetents should No1,reduce Debt as much as possible No2,reduce Debt even more than No1.If then there is money left invest it within the business.Any excess profits should be paid to the Shareholders as Dividends.If the board do not understand this they should be sacked and or the company Sold, its that Simple.

[onehanded] 14/11/2024 08:48

At some stage these buybacks will have an upwards effect though probably not till into 2025. Expect some of the bigger institutions are slowly building…

[diku] 14/11/2024 08:45

If VOD gets to 63p again then I think BT will retest 105p again if figures are not as expected or hint of slowdown...

[diku] 14/11/2024 08:43

Buy back with one hand...issue shares with the other hand...going round on a round about...