Vodafone’s new chief under pressure to shine as analysts predict weak annual results
Vodafone’s new chief Margherita Della Valle will be looking to lay out a convincing vision for the firm on Tuesday as she updates the City with its full year results for the first time in the top job.
Della Valle, the former finance chief of Vodafone, has been tasked with breathing life into the FTSE 100 laggard after a 58 per cent collapse in its share price over the past five years.
Former chief Nick Read had failed to excite the market with his dealmaking strategy and lacklustre revenue growth, attracting the attention of aggressive activist investors last year.
Della Valle told investors “we can do better” when she updated City on the firm’s third quarter results after a sluggish year under Read’s leadership.
The market will now be watching keenly to see whether she can make headway on its turnaround efforts, with boosting performance in Germany, Italy, and Spain expected to be key objectives to the revival.
Analysts are currently expecting the firm to post pre-tax profits of €4.8bn, down from just over €5bn last year, while revenues are expected to come in at €45.15bn for the full year.
Hargreaves Lansdown analysts said it is “not looking too hopeful” that the fourth quarter of the year will prove a major improvement on the previous three quarters.
“It will be interesting to hear further details from the new CEO on her vision for the business. Rolling out broadband, fixed line and TV services across its European markets has been the aim recently since customer retention is significantly better among those taking multiple products,” said Matt Britzman, equity analyst, Hargreaves Lansdown.
“Price hikes throughout Europe are already underway, which should help limit some of the impacts of higher costs,” he said.
Britzman added that the market would be “on the lookout for any M&A news”.
“There could be portfolio changes on the horizon, not least of which may centre around the ongoing talks to merge Vodafone’s UK business with Three UK,” he said.