(Alliance News) - Telecommunications firm Vodafone on Tuesday tightened full-year earnings guidance at the upper end of its previous range, after solid interim growth.
Vodafone shares were up 4.6% early Tuesday, the top FTSE 100 gainer.
Revenue for the half-year to September 30 rose 5.0% to EUR22.49 billion, but pretax profit fell 34% to EUR1.28 billion. This was largely due to Vodafone booking 'other' expenses of EUR108 million versus a gain of EUR1.06 billion a year ago.
Adjusted earnings before interest, tax, depreciation and amortisation, after leases - which doesn't include the 'other' charge - grew by 7.9% to EUR7.57 billion from EUR7.01 billion, a 6.5% rise on an organic basis.
Vodafone narrowed its full-year adjusted Ebitda after leases guidance to EUR15.2 billion to EUR15.4 billion, the top end of its prior range of EUR15.0 billion to EUR15.4 billion. Adjusted free cash flow guidance was upgraded to at least EUR5.3 billion, from at least EUR5.2 billion.
"The results show we have demonstrated good sustainable growth and solid commercial momentum. Our strengthened performance in Africa and Europe puts us on track to be at the top end of our guidance for this year, as well as firmly within our medium-term financial ambitions," said Chief Executive Nick Read.
Vodafone kept its dividend interim steady at 4.50 cents.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 7,359.95
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Hang Seng: up 1.2% at 25,691.34
Nikkei 225: closed up 0.1% at 29,808.12
DJIA: closed marginally lower, down 12.86 points at 36,087.45
S&P 500: closed marginally lower, down 0.05 of a point at 4,682.80
Nasdaq Composite: closed marginally lower, down 7.11 points at 15,853.85
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EUR: down at USD1.1376 (USD1.1420)
GBP: up at USD1.3460 (USD1.3428)
USD: up at JPY114.24 (JPY113.95)
Gold: up at USD1,864.58 per ounce (USD1,860.70)
Oil (Brent): up at USD82.82 a barrel (USD81.35)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
1100 CET EU gross domestic product
1100 CET EU unemployment data
0830 EST US retail sales
0830 EST US import & export price indexes
0855 EST US Johnson Redbook retail sales index
0915 EST US industrial production
1000 EST US manufacturing & trade
1000 EST US NAHB housing market index
1630 EST US API weekly statistical bulletin
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The UK unemployment rate declined by more than expected, while job vacancies hit a record high. The jobless rate eased more-than-forecast to 4.3% in the three months to September from 4.5% for the three months to August. Consensus, according to FXStreet, had pencilled in a decline to 4.4%. The unemployment rate remains just 0.3 percentage point higher than before the pandemic. Over the same period, annual growth in average total pay - which includes bonuses - was 5.8%, while regular pay, which strips out bonuses, was 4.9%. The Office for National Statistics estimates there were 29.3 million payrolled employees in October, up 160,000 on September. This was also 235,000 higher than February 2020's level, so payrolled employees are above pre-virus levels.
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US President Joe Biden and China's Xi Jinping traded strong warnings on the future of Taiwan at a virtual summit meant to establish "guardrails" against conflict between their rival superpowers. The video-link summit, which took place late Monday in Washington and early Tuesday in Beijing, lasted a "longer than expected" three and a half hours, a senior US official told reporters. "The conversation was respectful and straightforward." While the goal was to settle an increasingly volatile relationship between the giant economic and geopolitical competitors, tension over Taiwan – a self-governing democracy claimed by China – loomed large. Chinese state media reported after the summit that Xi cautioned Biden that encouraging Taiwanese independence would be "playing with fire". The White House readout after the summit was considerably more measured, but between the lines, Biden's pushback against Beijing's increasingly aggressive posture toward Taiwan was clear. "On Taiwan, President Biden underscored that the US...strongly opposes unilateral efforts to change the status quo or undermine peace and stability across the Taiwan Strait," the White House statement said.
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BROKER RATING CHANGES
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PEEL HUNT CUTS PETROPAVLOVSK TO 'HOLD' - TARGET 25 PENCE
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JEFFERIES RAISES TT ELECTRONICS TO 'BUY' ('HOLD') - TARGET 320 (225) PENCE
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COMPANIES - FTSE 100
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Imperial Brands lifted its dividend as the cigarette maker saw benefits from its new strategy during its recently ended financial year. Revenue rose 0.7% to GBP32.79 billion in the financial year that ended September 30, lifted by increases in excise duty, and pretax profit improved by 49% to GBP3.24 billion from GBP2.17 billion. Organic net revenue growth was 1.4%, driven by tobacco growth of 1.5% while next generation product sales fell 3.9%, reflecting market exits. Imperial raised its dividend by 1.0% to 139.08 pence from 137.7p. "This has been a year of important progress and significant change, as we begin to deliver on the new, focused strategy we announced in January 2021," said Chief Executive Stefan Bomhard. Imperial said 2022 is the second year of its two year strengthening phase, and it will step up investment and carry out further reorganisation. It expects to deliver net revenue growth in financial 2022 at a similar level to the recent financial year, at constant exchange rates, while adjusted operating profit is expected to grow slightly slower than net revenue, reflecting the step up in investment.
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Land Securities reported a 2.7% increase in EPRA net tangible assets per share to 1,012p at the end of September from 985p at March 31. The property developer and investor swung to a pretax profit of GBP275 million from a loss of GBP835 million a year ago. While there remain risks ahead, the firm said its outlook is one of "cautious optimism". "We are providing high-quality, sustainable office space that is very well aligned to today's customer demands; in our retail portfolio we are generally seeing leasing activity supportive of ERVs for the first time in quite a while and increasing evidence of a 'flight to prime' for which our portfolio is well placed; and we are building real momentum with our mixed-use development activity," said LandSec.
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COMPANIES - FTSE 250
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Restaurant Group upgraded guidance after strong trading in recent weeks, noting a "minor improvement" in UK airport passenger volumes, leading to a partial recovery in sales run rates for its Concessions business. As a result, the Wagamama dining chain owner now expects full-year adjusted Ebitda in a range of GBP73 million to GBP79 million.
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Home repairs and improvements firm Homeserve raised its interim dividend by 10% to 6.8 pence from 6.2p, as it reported an 86% jump in pretax profit to GBP18.9 million in the six months that ended September 30 from GBP10.1 million a year before. Revenue rose by 14% to GBP610.5 million from GBP536.7 million. "This is another very good set of results for HomeServe, with significant progress across all areas of the business," said Founder & Chief Executive Richard Harpin, adding: "Our ambitions for the current financial year are unchanged, which means that we expect to deliver an acceleration in performance this year, followed by significant longer-term growth."
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COMPANIES - MAIN MARKET AND AIM
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Yew Grove REIT has accepted a EUR127.8 million cash takeover offer from Slate Office REIT. The offer of EUR1.017 per share represents just a 1.7% premium to Yew Grove's closing price on Monday, but shareholders also will receive a 1.20 cents dividend for the third quarter. The offer, which gives a EUR177.4 million enterprise value to Yew Grove when including debt, has been unanimously recommended to shareholders by the board.
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COMPANIES - GLOBAL
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Exxon Mobil is planning to sell a shale field in Texas, Reuters reported, as the oil major looks to land USD15 billion from divestments by the end of 2021. Up for grabs is Exxon's Barnett shale holdings, Reuters said. They include 2,700 wells and the assets span 182,000 acres. Citing a person familiar with the matter, Reuters said the producing assets are valued at between USD400 million and USD500 million. The news agency said Exxon plans to close any sale in January.
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BNP Paribas is working with advisers to assess a sale of its US arm, Bank of the West, Reuters reported on Monday. Bank of the West, with USD99.2 billion of assets as of June 30, ranks as BNP's biggest business outside Europe. The news agency, citing sources, said the Paris-based bank seeks to retreat from the American retail banking market after struggling to compete with "larger and better" capitalised rivals. A sale could be valued at about USD15 billion, Reuters noted. JPMorgan and Goldman Sachs are preparing the business for a sale, Reuters said, but discussions are still at an early stage and no deal is certain.
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Tuesday's Shareholder Meetings
Craneware PLC - AGM
Dunelm Group PLC - AGM
James Halstead PLC - AGM
New Star Investment Trust PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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