(Alliance News) - Telecommunications provider Vodafone on Tuesday continued the pattern of technology firms smoothly riding out the Covid-19 storm.
Vodafone said it delivered a good financial performance in its recent financial year and will maintain its dividend payments.
For the financial year ended March 31, the mobile phone operator swung to a pretax profit of EUR795 million from a loss of EUR2.61 billion in financial 2019 on revenue which rose 3% to EUR44.97 billion from EUR43.67 billion last year.
Vodafone said adjusted earnings before interest tax depreciation and amortisation grew by 2.6% to EUR14.9 billion, reflecting revenue progression and cost savings success. Free cash flow grew by 12% to EUR4.9 billion.
Vodafone kept its total dividend unchanged at 9.0 euro cents.
Looking ahead, Vodafone guided for financial 2021 adjusted Ebitda to be flat to slightly lower from EUR14.5 billion.
"The services Vodafone provides are more important than ever and we are committed to playing a key role in society's recovery to the 'new normal'," said Chief Executive Nick Read. "I am pleased with the rapid, comprehensive and coordinated way we responded to the COVID-19 crisis."
Vodafone shares were up 4.8% in a flat broader market early Tuesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 5,935.66
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Hang Seng: down 1.6% at 24,199.83
Nikkei 225: closed down 0.1% at 20,366.48
DJIA: closed down 109.33 points, 0.5%, at 24,221.99
S&P 500: closed marginally higher, 0.52 point, at 2,930.32
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GBP: flat at USD1.2331 (USD1.2328)
EUR: flat at USD1.0817 (USD1.0812)
Gold: firm at USD1,699.53 per ounce (USD1,698.03)
Oil (Brent): flat at USD29.81 a barrel (USD29.78)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
1100 BST Ireland monthly unemployment report
0830 EDT US consumer price index
1630 EDT US API weekly statistical bulletin
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UK ministers are to set out guidance on how people can travel safely on public transport as the coronavirus lockdown begins to ease. UK Prime Minister Boris Johnson has said he does not expect a sudden "flood" of people heading back to work following the publication of the government's "road map" for lifting the restrictions. However the prime minister has made clear he wants those who cannot work from home to start returning to their workplaces from Wednesday. It prompted a barrage of questions as to how it could be achieved amid warnings the government is watering down its clear "stay home" message. The devolved administrations in Scotland, Wales and Northern Ireland made clear they were not yet ready to follow the government at Westminster in beginning to relax the controls.
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BROKER RATING CHANGES
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JPMORGAN CUTS COMPASS GROUP TO 'UNDERWEIGHT' ('OVERWEIGHT') - TARGET 1150 (1600) PENCE
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UBS CUTS TUI TO 'SELL' (NEUTRAL) - PRICE TARGET 110 (290) PENCE
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JPMORGAN CUTS DIPLOMA TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 1850 (1760) PENCE
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COMPANIES - FTSE 100
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Land Securities said its annual results were hurt by the effects of Covid-19 and the longer-term societal and economic consequences are yet to be determined. For the financial year to March 31, the commercial property developer's pretax loss widened to GBP837 million from a loss of GBP123 million in financial 2019 as revenue slipped 6.3% to GBP414 million from GBP442 million. The company said the value of its assets fell 8.8% in the recent year to GBP1.18 billion from a decline of GBP557 million last year. LandSec slashed its full-year dividend 49% to 23.2 pence per share from 45.55p last year. "As a result of the significant uncertainty surrounding Covid-19, the board took the difficult decision in early April to cancel the third interim dividend. With limited change in the situation since then, the board is also not proposing the payment of a final dividend. We recognise that this is disappointing as income is an important component of our return for shareholders and are committed to resuming dividends at an appropriate level as soon as conditions stabilise," said Chief Executive Mark Allan.
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WM Morrison Supermarkets reported sales growth in the first quarter despite "highly volatile" trading patterns and a worse-than-expected Easter due to the ongoing coronavirus lockdown in the UK. For the 14-week period from February 3 to May 10, the grocer said like-for-like sales excluding fuel were up 5.7% - with retail sales up 5.1% and wholesale up 0.6%. Morrisons said that retail like-for-like sales were up 5% for the first six weeks of the year. Sales were flat in the first four weeks of financial 2021 with weeks five to seven being marked by "considerable stocking up" by customers, lifting sales. "At this stage, the impact of Covid-19 remains uncertain. The outlook for our sales is also uncertain, although we are adapting well to the new day-to-day circumstances, while being both proactive and reactive in taking new opportunities. In addition, we are confident that we can satisfy any ongoing increased demand if the eat-at-home market continues to be temporarily larger than usual," Morrisons said.
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COMPANIES - MAIN MARKET AND AIM
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Ryanair said it plans to restart 40% of its scheduled flights from July 1, subject to government restrictions on intra-EU flights being lifted. The Irish budget airline said it would operate a daily schedule of almost 1,000 flights, restoring 90% of its pre-Covid 19 route network.
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COMPANIES - GLOBAL
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Saudi Aramco reported a 25% drop in net income in the first quarter of 2020 to USD16.66 billion from USD22.21 billion, due to lower crude oil prices and narrowed refining and chemicals margins.
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Toyota Motor said it expected a 80% drop in its annual operating profit this year as it suffers "significant" fallout from the coronavirus pandemic. The Japanese auto giant declined to give a net profit forecast for the fiscal year to March 2021 but noted that the impact of the crisis on its business was "wide-ranging, significant and serious". The company now expects an annual operating profit of JPY500 billion, about USD4.6 billion, down 79.5% from the JPY2.44 trillion logged in the past year to March. Toyota forecast a near-20% drop in annual sales to JPY24 trillion, compared with JPY29.93 trillion achieved in the past year. The company's net profit for the past year to March came to JPY2.076 trillion, up 10% on the year.
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Allianz expressed a confident outlook despite a double-digit profit fall in first quarter of 2020. The Munich, Germany-headquartered insurer said revenue in the three months to the end of March increased 5.7% to EUR42.6 billion compared to EUR40.3 billion a year ago. When adjusted for currency and consolidation effects, revenue growth was 3.7%, driven by the company's Life-Health business segment. Operating profit declined by 22%, however, to EUR2.3 billion due to higher claims from natural catastrophes, as well as Covid-19-related losses. In addition, Allianz said its profit was hurt by the market downturn, which impacted the investment margin, and deferred acquisition costs. "The first quarter of 2020 showed the resilience of Allianz in these unprecedented circumstances," said Chief Executive Oliver Bate.
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Tuesday's Shareholder Meetings
GLI Finance
Macfarlane Group
IWG
Standard Life Aberdeen
HgCapital Trust
Reckitt Benckiser
Fidelity European Values
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By Tom Waite; thomaslwaite@alliancenews.com
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