Today, we have full-year results from Vodafone (LSE: VOD), BTG (LSE: BTG) and Premier Foods (LSE: PFD).
Growth opportunities
Vodafone’s shares are down around 2.6% to 228p or so on the day. Does that mean investors remain unimpressed, or is it perhaps just better to travel than to arrive?
The firm reports revenue up 10.1% to £42.2 billion with full-year organic service revenue down 1.6%. However, earnings before interest, tax, depreciation and amortization (EBITDA) are down 6.9% at £11.9 billion, with H2 EBITDA down 3.6%.
Free cash flow came in at £1.1 billion, with capital expenditure of £9.2 billion, up 45.7% year-on-year, suggesting potential for future increased earnings on the investment. Meanwhile, net debt stands at £22.3 billion, or £18.7 billion including $5.2 billion Verizon loan notes.
Vodafone declared a final dividend per share of 7.62 pence, up 2.0%, giving total dividends per share of 11.22 pence. The chief executive reckons the firm saw a year of continued progress with a return to organic growth in Q4. He says there are increasing signs of stabilisation in many of the firm’s European markets, supported by improvements the way the company executes its commercial operation and very strong demand for data. Fixed line, revenue trends are improving, supported by accelerating customer growth, and the firm’s recent cable acquisitions provide a strong platform for further growth.
The top man insists Vodafone has significant opportunities ahead, with only 13% of European mobile customers using 4G, and the firm’s market share in fixed services only a fraction of its share in mobile. He reckons businesses around the world are increasingly looking to put mobility at the centre of their own strategies.
The future looks bright for Vodafone, but I can’t help feeling that much anticipated growth is already priced into the shares.
High expectations and trading in line
Shares in specialist healthcare company BTG are also down on results-day, around 7% as I write.
Yet, the figures are in line with expectations, although expectations are high. Revenue grew 27% to £367.8m. Underlying revenue growth was 21%. Operating profit before acquisition adjustments and reorganisation rose 9% to £67.9 million. Profit before tax fell 20% to £26.7 million, perhaps explaining the share-price weakness, although that reflected increased investments, the impact of acquisition and foreign exchange movements, according to the company.
BTG’s chief executive reckons the firm delivered a good financial performance for the year, with each business delivering underlying growth of more than 20%. The outlook is positive, with BTG looking forward to another year of strong progress, and confident that the strategy being followed will, over time, enable the company to become a world leader in Interventional Medicine therapies.
BTG trades on a hefty valuation, but growth prospects remain strong. There isn’t much in today’s results to shake out long-term shareholders, in my view.
Loss making and high debt
Premier food’s shares are down a little today, but not as much as Vodafone’s and BTG’s. At first glance, that’s surprising. The food company reports last quarter branded sales broadly flat, with volume and value-market share gains across its categories. Marketing investment increased more than 80% over the last six months delivering what the firm calls ‘encouraging results’.
Trading profit of £131.0 million, an adjusted measure, is in line with expectations, but the headline figure is a loss after tax of £92.7 million, due, the firm says, to impairment charges. Net debt came in at £584.9 and the firm made an operating loss of £44 million. Meanwhile, there’s good news on the pension deficit, reduced to £211.8 million from £603.3 million.
The chief executive said the firm saw an improving sales trend during the fourth quarter due, he reckons, to a combination of brand investment, exciting new products and strong retail execution. On a cautionary note, he warned that the firm expects the near-term trading environment to be challenging.
These don’t look much like investment-grade figures or prospects to me so I’m happy to watch without being involved in the shares.
