Vodafone yesterday comfortably beat key analysts' expectations on earnings and revenues as it presented its full year results, the last under outgoing chief executive Sir Christopher Gent.
The UK mobile operator gave an upbeat forecast for this financial year, expecting revenues to grow 10 per cent and a small improvement in margins.
Vodafone resisted pressure to write down its 3G licences following licence write-downs last week by rival MmO2, BT Group's former mobile arm. But it still generated a pre-tax loss of £6.2 billion (€8.61 billion)) for the financial year after taking into account non-cash write-downs and amortisation of £14.6 billion.
But with capital expenditure of £5.2 billion for the year - kept lower partly by continued delays in rolling out its 3G network - the more closely watched free cash flow for the year more than doubled to a record £5.17 billion.
The figure, £500 million up on analysts' expectations, delighted investors, but there was disappointment that Vodafone had ruled out share buybacks in the near future and had not increased its dividend more aggressively.
Vodafone's dividend for the year rose to 1.69p per share, a 15 per cent rise on last year, and Sir Christopher signalled its longer- term intention to pay out more of the company's earnings in dividends.
Sir Christopher said the firm had not increased the dividend by a higher amount because it wanted to retain some fire-power for future acquisitions. The shares closed 3p lower at 122½p, reversing early gains.
In the year to end March, the group's proportionate EBITDA (earnings before interest, tax, depreciation and amortisation) in non-controlled operations such as Verizon Wireless in the US rose by 26 per cent to £12.68 billion, against consensus market expectations of £12.3 billion.- (Financial Times Service)
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