Vodafone has hailed a "new chapter" for the group after swinging to an annual profit, driven by a strategic focus on its core markets, and has forecast further earnings growth in the year ahead.
Financial Performance
The telecoms giant reported pre-tax profits of 1.86 billion euros (£1.61 billion) for the year ending March 31, a sharp reversal from losses of 1.48 billion euros (£1.28 billion) in the previous year. Service revenues surged by 8.8%, contributing to the robust performance.
On an underlying earnings basis, Vodafone posted a 3.8% increase to 11.35 billion euros (£9.83 billion), which management said was at the top end of its guidance range.
Outlook and Guidance
Despite cautioning over uncertainties stemming from the Iran war and the broader global economic environment, Vodafone expects underlying earnings to rise to between 11.9 billion and 12.2 billion euros (£10.31 billion to £10.57 billion) in the 2026-27 financial year.
The group is focusing on its largest markets in Germany, the UK, and Africa, while exiting smaller operations. Last week, Vodafone announced a £4.3 billion deal to acquire full ownership of VodafoneThree in the UK by buying out partner CK Hutchison.
UK Merger Integration
VodafoneThree was formed last year through the merger of Vodafone and Three in the UK, with Vodafone initially holding a 51% stake and CK Hutchison 49%. The combined entity is now the UK's largest mobile operator and one of the fastest-growing broadband providers.
CEO Margherita Della Valle stated: "After the transformation of the last three years, we are now a simpler company with a stronger growth outlook. Our strategic progress has generated good group service revenue momentum, together with profit and cash flow at the upper end of our guidance range."
She added: "Our early successes from the UK merger integration reinforce our confidence in its potential, and I am delighted that we are now gaining full ownership. Looking ahead, we will continue to drive continuous improvements across our business."
Regional Performance
In Germany, service revenues rebounded in the second half of the financial year, growing 1.4%. In the UK, full-year service revenues rose 29%, with a 31.3% jump in the second half.
For the 2026-27 financial year, Vodafone guided for underlying earnings of 7.6 billion to 7.9 billion euros (£6.59 billion to £6.85 billion) for its European business.
