Vodafone's H1 2024: A Turning Point in the Telecom Giant's Struggle

 

Vodafone H1 24 –14/11

– the Vodafone share price has been in a slow decline for the last 5 years, falling to a 25-year low, below 70p in the summer of this year. Since those lows, we've seen a slow recovery as new CEO Margherita Della Valle looks to try and turn the ailing business around. Almost all of its European businesses have proved to be a drain on the balance sheet, which makes the decision last year to reject an €11bn bid last year by Iliad for its underperforming Italian business.

 

That is now ancient history with the new CEO looking to focus more on the UK business, after announcing last month a €5bn deal to offload its Spanish business to Zegona for €5bn. The increased focus on the UK and German businesses has seen the company agree a deal with Hutchison Holdings take over the running of its UK Three network, while also agreeing an 18-year roaming deal with 1&1 Mobilfunk in Germany. 

In Q1 the company reported revenues of €10.74bn, a decline of 4.8%, with declines in all its major markets except the UK, which saw organic services revenues rise 5.7% to £1.7bn. Germany, Italy and Spain all saw revenues decline by 1.3%, 1.6% and 3% respectively. Its smaller South Africa market managed to see a gains of 9%. For H1 revenues are expected to come in at €21.6bn with organic services of €18.4bn, a 5% decline from the same period last year, with Spain expected to see the biggest decline of -3.4%. The UK business is forecast to see a 5.78% rise in organic growth to $2.8bn.

 

Burberry H1 24 – 16/11

with the share price hitting record highs back in April the outlook was looking good for Burberry, with the shares getting a lift on decent returns from the likes of LVMH, Hermes and the wider luxury sector as Asia demand surged in the wake of the relaxation of lockdown measures in China at the end of last year. Those heady highs seem a long way away now given the sharp declines seen in the luxury sector in the months since then, on the back of a sharp slowdown in demand across all of its markets, and China in particular, with the shares slipping to one-year lows earlier this month. When Burberry reported in Q1 the retailer reported an 18% rise in Q1 sales, pushing quarterly revenue up to £589m, which was below consensus forecasts.

 

Mainland China saw an increase of 46%, while south Asia Pacific rose 39% and Japan 44%. A poor performance from its US markets saw an 8% decline and it was this that appeared to disappoint along with the fact that various other luxury retailers have reported sharp slowdowns in luxury spending that appears to have dragged the sector lower. Burberry also left full year guidance unchanged in Q1 saying that they still expected to see low double-digit revenue growth for full year 2024.