Vodafone directors to 'sign off' on extension to share buyback plan

The board of Vodafone will today ratify an extension of the mobile operator's aggressive share buy-back programme after repurchasing £564.7 million (€821.5 million) of stock in the past eight weeks.

The company, which bought back £4 billion of shares last year, is expected to announce a continuation of the programme when it unveils full-year results tomorrow.

There are a large number of Vodafone shareholders in the Republic, with many of them accepting shares in the company when Vodafone purchased Eircell from Eircom several years ago. Vodafone is also one of the leading mobile companies in the Republic, competing alongside O2 and Meteor.

Vodafone board members, who discussed the figures at a formal meeting last week, will "sign off" the buy-back today.

Industry analysts are forecasting a similar size repurchase for the current financial year. But expectations of a richer programme, perhaps reaching £4.5 billion, have gathered pace following continued buy-backs in the current financial year.

Vodafone has spent more than £560 million since the start of April, and holds 4.19 billion of its own shares, or 6.5 per cent of the total ordinary shares in issue.

The company has instructed a number of banks to buy shares on its behalf, with Goldman Sachs purchasing 3.5 million shares in the most recent transaction at an average of 139.2p. At the end of last week, Vodafone shares rose 3 per cent to close at 145p.

In its last statement on the share repurchase programme, Vodafone said targets for further buy-backs would be disclosed with the full-year results and would be put to the group's annual meeting.

Today's board meeting will also reaffirm plans for a more generous dividend payout as the mobile operator prepares to announce underlying earnings up 2.3 per cent at £12.9 billion on sales of £34 billion.

The telecoms industry will be watching Vodafone's results for indications of growth in third-generation (3G) demand and any signs of a turnaround in its troubled Japanese business.

Lehman Brothers analysts expect Vodafone to report about 1.5 million 3G subscribers at the end of March, which could raise doubts about its target of 10 million subscribers by the end of this financial year. - (Financial Times Service)