Print Email Download Reference This Send to Kindle Reddit This
submit to reddit

The Minority Shareholders Of Vodafone Marketing Essay

In September 1988 the company was again renamed Racal Telecom and on 26th October 1988 Racal Electronics floated 20% of the company. On 16th September 1991 Racal Telecommunication was demerged from Racal Electronics to Vodafone Group.

Later on Vodafone Group start developing its business and acquired many telecommunications firms to expand their operations. In 1997 Vodafone introduced its speech mark logo, as it is a quotation mark in a circle; the 0’s in the Vodafone logotype are opening and closing quotation marks, suggesting conversation.

Company Profile

Vodafone Group Plc is a British multinational telecommunications company headquartered in London, United Kingdom. It is the world’s second largest mobile communications company measured by both subscribers and revenues as on December 2011 it had 439 million subscribers.

Vodafone owns and operates networks in over 30 countries and has partner networks in over 40 additional countries. Vodafone Global Enterprise division provides telecommunication and IT services to corporate clients in over 65 countries. It also owns 45% of Verizon Wireless, the largest mobile telecommunications in the United States measured by subscribers.(Vodafone Group, n.d.)

Nature of business

The main purpose of Vodafone is to provide networking services to the people who are engaged in business or for their personal use. It also provides networking services to the corporate users to make efficient networking and flow of information inside the organization and outside the organization.

Here are some different areas of business:

Business Solutions

Through this Vodafone try to commence a powerful yet simple communication to the different businesses. It innovates the a whole new generation of voice and data services in markets across the world so you can carry on taking advantage of every opportunity that business provides.

Business ideas

Vodafone also provides some new business ideas to be implemented to save time and cost through different communication devices.

Vodafone Global Enterprise

Vodafone is enabling the businesses of all size to perform more effectively in the changing world. Vodafone Global Enterprise is Vodafone’s specialist enterprise communication organization. We deliver managed communication to empower global business and to help them stay agile and competitive.

Marketing Solutions

Vodafone marketing solutions understands every brand is different; every brief is different and, just as importantly, every country is different. For this reason we believe in the power of building long-term media partnerships with clients. Tailoring our media responses to the brief per market, we draw on the media vehicle available to us to deliver the highest impact and results.

Mobility Solutions

Time spent traveling and in between meetings can be more productive using mobile email and mobile broadband - transforming the efficiency of your people. With instant access to the web, emails, diaries, and documents, you can offer superior customer service by being responsive and informed. Vodafone helps you to sharpen up your competitive edge – and makes it easier to predict and control the cost of communications.

Operations and Expansions

Vodafone is currently working in almost 40 to 50 countries of the world while providing the different communication services according to the need of people of the country.

Vodafone had expanded its business globally very fast and try to capture every opportunity of expansion by acquiring the businesses. Here are operations of Vodafone in different countries with respect to articles and newspapers.

Mobile phone group Vodafone is set to buy Cable & Wireless Worldwide (CWW) for $1.67 billion.(Sutton, 2012)

UK based operator Vodafone is set to increase its footprints in Turkey’s telecoms market following today’s announcement that it has agreed to acquire fixed line and internet operator Borusan Telekom.(Bevir, 2009)

As predicted last week in Euronews, Vodafone has struck a multi country partnership agreement with Kuwait-based Zain. Vodafone, which already has regional operations in Egypt and Qatar, hopes the non-equity deal will expand its presence in the Middle East by enhancing network coverage and harmonizing roaming rates.(Rainford, September 3, 2012)

Vodafone is taking mobile services to the next level through its 360 service that combines a cloud-based address book for the contacts integration with social communities such as Face book and Twitter, an application store and entertainment such as music and games- all accessible from phone, PC or Mac.(Menon, 2009)

From this we can come to know that how Vodafone is developing and expanding in its business in different countries through acquiring competitors.

Listing on Stock exchanges

Vodafone is listed on different stock exchanges in the world where it is performing exceedingly well and attracting the investors. It is listed on following stock exchanges.

LSE (London Stock Exchange)

NASDAQ (National Association of Securities Dealers Automated Quotations)

Financial Overview as per Annual Report 2012

Revenue

We generate our services through the supply of calls, text messaging, data and other services over our networks. Consumers pay for these services either via contracts or through buying their airtime in advance. These revenues models give us excellent visibility of our business. In addition, we are not reliant on single large contracts, with the top ten biggest corporate accounts representing less than 1% of annual revenue. Secondly, the majority of our services are sold in advance reducing credit risk and generating an attractive working capital profile. Finally, our services have become such a part of our customer’s everyday lives that they have become non-discretionary in nature.(Vodafone Group Plc, 2012)

Cash Flow

Our track record of converting revenue into cash flow is strong. Firstly, we run highly efficient networks where we seek to minimize costs, thus supporting a strong gross margin. Secondly, our market share position in many markets is strong and growing, with this in-market scale being a key driver of coast efficiencies and EBITDA margin.(Vodafone Group Plc, 2012)

Shareholder Remuneration

The cash generated from operations allows us to sustain a generous shareholder returns programme while also investing in the future prosperity of the business. Our annual regular dividend per share, which we have targeted to grow at least 7% to march 2013, is comfortably covered by our free cash flow guidance.

In addition we have paid out a special dividend from Verizon Wireless, and are close to completing a ₤6.8 billion buyback programme financed through recent assets disposals. We have returned over 30% of our market capitalization to shareholders over the last four years.(Vodafone Group Plc, 2012)

Ratio Analysis

Table

Gross Profit Margin

49%

Earnings Per Share

13.74

EBIT Margin

24.7%

Dividend Per Share

13.52

Current Ratio

0.8

Quick Ratio

0.7

Leverage Ratio

1.8

Asset Turnover Ratio

0.3

Return On Assets

5%

Return on Invested Capital

6.6%

Debt Equity Ratio

0.37

Book Value Per Share

$24.76

Inventory Turnover Ratio

46.20

Working Capital Per Share

$-1.29

Cash Per Share

%2.30

Earnings per Share

Figure

The comparison of earning per share among 3 years shows that the organization is reducing its earnings per share year by year because of more borrowings and less dependent on the worth of the share. This could be also because of increasing costs and paying high dividend every year. The company should retain some profits to maintain its earnings per share.

Most of the time the EPS decreases when the company issued more shares to the public in order to increase capital but this action decreases the earning per share. The shares can be increased by Secondary Public Offering (SPO) or bonus share allotment.

As EPS is a clear indicator toward the investor so the company should try to maintain its EPS to attract new investors. So to increase EPS the company can decrease the number of shares by buying back shares from investors or by reducing its expenses.

Figure

The company profits are also decreasing year by year that could be due to increase in operating or non-operating expenses. The expenses and costs should be in control in order to achieve good profit. If the company sells out its operating assets then it will result in decrease in profits as these assets provide the productivity and hence increase in profits.

Figure

As the dividend per share is increasing year by year so that means the organization is paying to its shareholders frequently. The company is not retaining the profits that are why the profits are decreasing in the previous figure. The company should pay dividend to its shareholders but in a balanced manner so that the EPS and profits should not be affected by divided distribution.

Conclusion

With all the analysis of the data and presentation of data in the report I came to a conclusion that the Vodafone is well worth organization and is developing with pace but unnecessary expansion and acquiring of other organization should be in control. As the profits and earnings per share is decreasing year by year but the distribution of dividend is increasing that make no sense that if there is not sufficient profits then how a company is paying high dividends. In order to attract investor it is also necessary that the profits should be. So the distribution of dividends, EPS and profits should be balanced in a way that all of these attract investors and create goodwill among the people.

Print Email Download Reference This Send to Kindle Reddit This

Share This Essay

To share this essay on Reddit, Facebook, Twitter, or Google+ just click on the buttons below:

Request Removal

If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please click on the link below to request removal:

Request the removal of this essay.


More from UK Essays

Doing your resits? We can help!