VODAFONE shares powered to an all-time high yesterday as the UK market's leading mobile phone operator reported strong results for the year to March, along with an upbeat statement for the future.
Profits rose 21% to #650m and dividends are raised by 15% to 13.63p after a final of 2.82p.
Vodafone connected 563,000 customers to its UK network in the year, compared with 415,000 in 1996-1997. It now has 3.4 million customers, 38% of a buoyant market, which is a reduction from 40% a year earlier as Orange and One-to-One expanded from relatively low bases. Revenue per customer was unchanged at #427, with a 14% rise in call volume offset by price cuts.
Mobile handsets are subsidised by the operators but the average cost per connection fell from #154 to #99 as handset prices fell. The cost of encouraging customers to move from analogue to digital was halved to #60.
Three-quarters of customers are now on digital, up from 52%, encouraged by price reductions. Vodafone is reorganising its distribution business into three units, retail which concentrates on the personal and small business market through 240 owned shops; Vodafone Connect, which sells to the same markets through independent distributors; and a corporate arm which targets larger businesses through direct sales.
The international operations have critical mass, contributing #122m to operating profits, having only passed break-even in the previous year. Vodafone's overseas customers represent effectively 41% of the group total, with operations, usually with local partners, in France,
Germany, Holland, Sweden, South Africa and Australia.
These markets are generally behind the UK, which Vodafone believes has itself much further to go.
Chairman Sir Ernest Harrison said: ''We expect the market to be further stimulated through increased usage and a growing number of customers. We are now taking the initiative to create the conditions for a larger market and to sustain our market leadership.''
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