Vodafone Group Plc’s pre-tax profits for the year to March 31 exceeded market forecasts, coming in at #363.3m against consensus forecasts of between #350m and #360m. Vodafone Ltd, the UK network operating company, had a record year with a growth of 40% and 335,000 new subscribers, making a total of 1.2m subscribers at year-end. Chris […]
Vodafone Group Plc’s pre-tax profits for the year to March 31 exceeded market forecasts, coming in at #363.3m against consensus forecasts of between #350m and #360m. Vodafone Ltd, the UK network operating company, had a record year with a growth of 40% and 335,000 new subscribers, making a total of 1.2m subscribers at year-end. Chris Gent, managing director for Vodafone Ltd, highlighted the difference between Vodafone and its closest competitor Cellnet Mobile Communications Ltd, saying that Vodafone intended to maintain revenue and profit growth at the highest level possible whereas Cellnet was going for market leadership with the highest number of overall subscribers. He accused Cellnet of spending more to gain lower revenue customers since Vodafone’s operating costs grew less than those of Cellnet in the year to September 1993. He went on to say that Vodafone does not envisage further tariff changes this year. Although most new customers joined the analogue network, the company won 22,000 new subscribers to its EuroDigital and MetroDigital services. In fact it sees the key challenge as transferring users from analogue to digital networks. Vodafone estimates that at the end of this year there will be a fifty-fifty split between the two networks. Gerry Whent, chief executive of Vodafone Group Plc, confidently predicts that by this time next year digital will be steaming ahead with digital handsets being the most desirable product by Christmas. Vodafone’s UK companies also performed well with Vodapage Aircall, the paging network operation, reaching the 200,000-user mark following the merger of the two companies. Paknet, the packet data network, also moved into profit for the first time. Vodafone’s overall object is to achieve as many GNP adjusted Pops outside the UK as within the UK by the end of this financial year. Or put more simply it wants to reach the more affluent people in each country and make them subscribers. Given that it had 57.1% of the UK business market share in 1993 this seems to be a fairly tall order. It is however making significant headway in overseas market with network operating companies with 10% or more shareholding.
The group has 45% of Panafon SA in Greece. Starting commercial operation of digital mobile service in July 1993, it had connected 32,000 subscribers by year-end, a current net weekly growth rate of 1,300 subscribers. And in South Africa, Vodafone has a 35% stake in Vodacom Group Pty Ltd, which opened its GSM digital mobile telephone service in March 1994 and already has 50,000 subscribers, a 3,500 net weekly growth rate. In Holland, Belgium, Spain and Ireland, Vodafone reckons it has an aggregate target market of 13.8m subscribers, on a Gross National Product per head of population-adjusted figure – reflecting the number of people in those countries that can afford cellular. The group also has stakes in NordicTel AB, in Sweden, and Cofira SA in France, both of which have just started commercial operations. And Vodafone says it plans to bid for four profitable network operators in the coming year, increasing its GNP per population target figure to 15m. Vodafone plans a two-for-one capitalisation issue on July 8. The announcement of the results pleased the market and pushed up the share price by 5 pence to 527 pence.