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Vodafone returns to growth and beats forecasts

Staff writer |
Vodafone's organic sales growth returned to growth and beat expectations after a strong performance in the fourth quarter, hiking the final dividend 2% to celebrate completing its Project Spring investment programme.

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Thanks to the best result in Europe for six years and acceleration in Africa, Middle East and Asia Pacific, organic service revenue grew 2.5% in the three months to March 31, well ahead of forecast 1.5%.

With earnings before interest, tax, depreciation and amortisation up 2.5% to €11.6bn, this represented a return to organic growth in both revenue and EBITDA for the first time since 2008.

As it moves to reporting its finances in euros, group revenue hit €40.97bn, an organic increase of 2.3% over the year, with service revenue up 1.5% to €37.16bn.

Europe service revenues were down just 0.6% on an organic basis, helped by a 0.5% rise in the fourth quarter when AMAP surged 8.1% to deliver 6.9% growth for the full year.

At the pre-tax line there was a €3.82bn loss and a basic loss per share of 15.08p.

Adjusted earnings per share from continuing operations fell 9% to 5.04p and a proposed final dividend per share of 7.77p will give a total dividend per share of 11.45p.

Chief executive Vittorio Colao said it was a year of "strong execution" for the Vodafone that resulted in the return to organic growth.

"We achieved the first quarter of positive revenue growth in Europe since December 2010 while growth in AMAP accelerated with strong performance in South Africa, Turkey and Egypt."

He said EBITDA margins were also improved year-on-year thanks in main to cost efficiency programmes.

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