[Ben]

http://news.bbc.co.uk/1/hi/business/7091994.stm


Mobile phone giant Vodafone has said it is upbeat on prospects for the firm's financial performance after reporting a solid set of half-year profits.

The firm said it had raised full- year forecasts of operating profit, revenue and cashflow.

In the six months to 30 September, the firm made pre-tax profits of £4.56bn compared with a £3.33bn loss in the same period last year.

Revenues were boosted by a strong performance in emerging markets.

Vodafone now expects full-year revenue to total between £34.5bn and £35.1bn, reflecting improvements in operating performance and beneficial movements in foreign exchange rates.

...
Ok, well we know why they made a loss last year, but it's still good to see things back on track. Who knows, perhaps confidence in Arun Sarin is growing? It'd be about time!

Strategy over at Vodafone is still very steady-as-she-goes, with them clearly maintaining a "don't rock the boat" policy in terms of tariff structure and services, but their caution seems to be paying off.

[Hands0n]

With Sarin and Bond on the team it is unlikely that Vodafone will actually do very much wrong at all. These two have a very low-risk approach well suited to the City Financial District. They'll not let Vodafone be wreckless - although they will take seemingly huge losses with their eye firmly on the ball a year or so ahead. Visionaries, I think its called :)

It does take quite a bit of bottle to take a £3.33bn loss - especially as the shareholders will be confronting you before the next year's figures are out. But shareholders are a completely fickle lot - £4.56bn profit this year means a lovely little divvy for them. And so they'll forgive Sarin for his transgressions of last year.

I reckon that Sarin and Bond are going to put Vodafone in a very strong global position over a few years, if they're allowed to. If you're a betting man then I'd suggest putting a few shillings on Vodafone.

[3GScottishUser]

No surprise re this result. Vodafone have been repositioning and dumping difficult saturated markets in favour of developing markets with growth potential.

I agree that their strategy looks a sound one.

[Nero]

Vodafone have been repositioning and dumping difficult saturated markets in favour of developing markets with growth potential.

Which category would you say the UK market is in?

[Ben]

Neither, maybe it could be described as 'Mature'. Either way, it's home, no chance of the UK being bumped :p Or the majority of the European networks, for that matter where they already have a foothold.

The problem was saturated markets that Vodafone was trying to get into, like Japan and a few others. As Three have discovered, it's possible, but it costs an incredible amount of money for very little/no return in the short-medium term. By shifting that investment to developing markets things are working out much nicer on the balance sheet.

[Nero]

Neither, maybe it could be described as 'Mature'. Either way, it's home, no chance of the UK being bumped

Certainly under Chris Gent the UK was seen as "home" but under Sarin it feels as though it's just a another market. Whilst the UK market is certainly generating cash, it is a very costly market to compete in.

[Ben]

I agree, but they're established here, very established in fact - particularly with business. There's always the cost of competition, even in developing markets, but as long as Vodafone don't start losing millions of subscribers in the UK then it's a (very) long way off popping up on Vodafone's cull list.

[Hands0n]

Whilst the UK market is certainly generating cash, it is a very costly market to compete in.

The thing is, and this is not well understood by Europhiles (not that I'm accusing you of being one), is that the UK market is not one to be ignored. It is true that the UK is a very saturated one - and has been for decades as we play a lead role in consumerism. But it is that consumerism that keeps negates the saturation. Generally, we have a higher disposable income than many other nations, and moreso we are prepared to spend it.

A good example of British spending might be a comment made to me by a local Turk this year on holiday (in Turkey). He was praising the Brits who came every night to his restaurant and bought food and drink. He was positively scathing about the Eastern Europeans and other nations who bought their fodder in local shops and ate in their hotel rooms, spending nothing in "the strip".

Back home, we spend like there is no tomorrow - as exhibited by the huge investments in the likes of Bluewater, Lakeside, Brent Cross and many others across the land.

So Vodafone have no problem at all staying here in the UK - their income from this "difficult" market is significant core business for the firm. If it were not they'd have been off a long time ago.

[Nero]

The point I was trying to make with my rather brief post above is that we cannot treat markets in a binary manner "difficult saturated" and "developing markets" there are many shades in between.

Not too many years ago when VF where still holding on, and losing money, in Japan they justified their position by saying it gave them visibility/exposure to the emerging market trends. As such the losses could be justified by the early experiences learnt in the mature market, and then being able to export this knowledge elsewhere. Didn't last long though.

At no stage am I suggesting that VF are about to jump from the UK, but I doubt that Sarin sees VF as a UK company.

[Ben]

Well, that line didn't convince me just then, and given that they gave up on the Japan arm I'd say it didn't convince anyone else either ;)

True, Vodafone aren't a UK company in a manner of speaking, they're a global company, but they're still UK based and I believe (and believe Sarin believes) that being UK based still has kudos with the rest of the world.

[Nero]

(and believe Sarin believes)

Not too sure, but without a comms link directly into Sarin's head it would be hard to know.