What Full-Year Results Mean For Vodafone Group plc, BTG plc And Premier Foods plc

Do full-year results strengthen the investment case for Vodafone Group plc (LON: VOD) BTG plc (LON: BTG), and Premier Foods plc (LON: PFD)

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

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.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Kevin Godbold owns shares in BTG. The Motley Fool UK has recommended BTG. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »