11th November 2014
Vodafone has announced it will enter the competitive home broadband and television market next year.
The Share Centre has recommended Vodafone as a hold for investors as the mobile company raised its full-year profit guidance and its interim dividend rose by 2%.
The move into broadband and TV comes as the company prepares for the challenge from BT entering the mobile market.
Vodafone pointed to a slowing in the decline in sales of its core services, due to better performance in Europe and stronger take-up of 4G contracts.
The company put its full-year pre-tax profit guidance at between £11.96bn and £11.9bn, towards the upper end of previous forecasts.
Ian Forrest, investment research analyst at The Share Centre, said: “Vodafone’s interim results today showed improved demand in its European markets although second quarter revenues still fell 1.5% and net profit for the first six months dropped from £18bn to £5.4bn.
“Sales in Africa, the Middle East and Asia rose 5.7%, the interim dividend was lifted 2% and full-year profit guidance was raised slightly.”
He added: “These are encouraging comments from Vodafone and we continue to recommend the shares as a ‘hold’, especially for investors seeking a good income from a defensive business that generates large amounts of steady cash flow. We would like to see further improvement in the company’s key European markets before we are tempted to get on board.”