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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: wooden ships who wrote (5236)	5/29/1998 7:44:00 PM
From: MrGreenJeans	Respond to of 42834

Vodafone To all who took Mr. Brinker's advice to buy Vodafone the following article will be of interest: Vodafone profit to get international boost LONDON, May 29 (Reuters) - Vodafone Group Plc (quote from Yahoo! UK & Ireland: VOD.L), Britain's biggest mobile telephone company, is expected to report a robust rise in annual pre-tax profits of at least 20 percent next Tuesday, fuelled by healthy domestic and international growth. Analysts have pencilled in a wide range in pre-tax profits of 611-681 million pounds -- including a net 10 million exceptional charge -- in the year to March 1998, compared to 539 million in the previous year. They also expect a 15 percent rise in dividend to 5.5p. Vodafone, which has stakes in 11 overseas licences and a worldwide proportionate customer base of 5.84 million, commands around 38.5 percent of the UK cellphone market. Britain's cellphone market reached penetration levels of 14.6 percent by the end of last year. Key average revenue per user (ARPU) figures, net of service providers, are expected to remain almost stable at around 427 pounds for the year, compared to 433 pounds last year. Analysts expect Vodafone's price reductions of around 12 percent since the beginning of this year to be largely offset by increased volumes. Having already reported subscriber figures -- a net 563,000 in the UK and 1.26 million net additions internationally in the year to March 1998 -- analysts are awaiting news on the pace of international profits growth and ARPU trends. Morgan Stanley Dean Witter telecoms analyst Saeed Baradar expects strong international and domestic growth to propel group revenues 37.6 percent higher to 2.41 billion pounds. Around 16 percent of revenue growth to some 1.72 billion is expected in the UK, coupled with a huge 153 percent in international growth to 685 million pounds, reflecting the first full year contribution from Vodafone's Panafon venture in Greece -- and its Libertel interest in the Netherlands from January 7, 1998. ''International margins are expected to expand significantly in the coming years; we forecast international EBIT (earnings before interest and tax) margins to increase to 19.6 percent and 28.3 percent over the next two years,'' Baradar says. He expects international franchises to increase their pre-tax profit contribution to 192 million pounds and 339 million pounds over the next two years from a current 63.5 million. Banking on UK cellular penetration rates rising to around 24 percent by 2000, Salomon Smith Barney believes Vodafone will have won 4.8 million UK subscribers and 5.6 million international customers -- up from a current 2.4 million -- by March 2001. While Vodafone's market share is expected to slip to around 34 percent by the turn of the century amid increasing competition from rivals, Salomon Smith Barney believes profits from international operations will represent 37 percent of the group's consolidated operating profit by 2001, or almost 500 million pounds. Vodafone's international operations span France, Sweden, the Netherlands, Greece, Germany, Australia and South Africa. Baradar expects Vodafone to add 690,000 subscribers in the year to March 1999. And unless the outlook for customer revenues or international profits growth exceeds expectations, he believes the group's shares are fully valued at around 670p. Vodafone's shares were trading unchanged at 675p on Friday afternoon.