14 November 2023
If you are covering Vodafone’s latest results or the announcement of the deficit in the BT pension scheme, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“Vodafone delivered a pretty unexciting set of results this morning, but that will please the market. The telecoms giant has been struggling of late in a very competitive mobile market, so the fact there are no clangers or warnings will be a relief to the market.
“The picture in Europe was a bit of a mixed bag, with performance in Italy and Spain weighing on good numbers elsewhere. Vodafone is improving its revenues in Germany, its biggest market, and the UK also saw strong performance. Its Vodacom business in Africa and its Turkish subsidiary also did well, suggesting there are some green shoots to cling on to.
“Importantly, the business did not see the need to cut the dividend as many expected, and that will boost confidence in the strategy and shares. However, in the telecoms space we still prefer BT due to the fact it has a better product pipeline with the fibre rollout and better execution. Ultimately BT is producing communications services that are faster and more consistent, and as such should perform well in the long-term.
“BT did update the market this morning on its defined benefit pension deficit, which has hung over the stock for a considerable amount of time. With it coming in at £3.7bn, this is more than was expected but the payment to the scheme doesn’t change. This removes an unknown and allows the business to move on and tackle the deficit, which can only be a good thing going forward.”
