24 July 2023
If you are covering Vodafone’s latest financial results, please find below a comment from Matthew Dorset, equity research analyst at Quilter Cheviot:
“Vodafone delivered mixed results today, though with revenue ahead of expectations and the company taking advantage of price rises in April they are more on the positive side. The company has announced a new chief financial officer, Luka Mucic formerly of SAP, but this is a questionable appointment to us. While it makes sense having a German national on the board when that region is Vodafone’s most significant one, it isn’t an appointment that excites. He might be fine as a telecommunications CFO, but for a company that wants to be seen as a tech powerhouse, it is all a bit too safe and too corporate.
“Furthermore, key indicators do show some deterioration across the business, particularly in Germany with broadband net losses of -121k, which is worse than last quarter at -84k. Similarly, in Spain and Italy there were broadband net losses. There were declines in mobile subscribers in the UK and Spain too as price rises have caused consumers to shop around for the best deals.
“However, what concerns Vodafone more than anything just now is its merger with Three in the UK, which is set to be completed before the end of 2024. The strength of the UK performance after significant CPI+3.9% price increases may give pause to the CMA who are scrutinising the proposed merger and its impact on competition and prices. We have seen across the tech landscape how dogged the CMA is being in questioning mergers and this is one that too us unlikely to escape its watchful gaze. For investors this will be one to watch closely as it progresses.”
