Vodafone has hailed a ‘new chapter’ after pivoting to focus on its key markets, even as its German business dragged on growth.
The group reported service revenue growth of 8.8 per cent to €33.5billion (£29.19bn) in the year to March, ahead of expectations, with profit and cash flow at the top end of its guidance.
Core earnings rose 3.8 per cent to €11.4billion (£9.91bn), while pre-tax profits of €1.86billion compared with losses of €1.48billion in the previous year.
The telecoms giant is focusing on markets like Germany, Britain and Africa, and pulling out of smaller markets such as Spain.
Chief executive Margherita Della Valle said: ‘After the transformation of the last three years, we are now a simpler company with a stronger growth outlook.’
Vodafone’s merger with Three has helped to boost its UK service revenue
However, Vodafone’s German business, which accounts for about 40 per cent of revenues, continued to weigh on growth.
Service revenue, which represents income from mobile and broadband subscriptions, fell 0.2 per cent over the last year in the division, as it faced mobile pricing pressure and the loss of 202,000 broadband customers.
Vodafone’s Africa operation grew service revenue by 12.9 per cent and now accounts for 21 per cent of group income.
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In the UK, service revenue increased 0.3 per cent, boosted by growth in its consumer and wholesale divisions following the merger with Three, partially offset by a decline in its business operation.
Vodafone said it had made a ‘strong start’ to the integration of Three UK, following the merger in May 2025. Last week, the group said it had bought out CK Hutchison’s stake in the joint venture for £4.3billion.
‘Full ownership of VodafoneThree makes the business a UK telecoms behemoth, but investors will want to see cost savings and new opportunities emerge quickly from the union,’ said Duncan Ferris, investment writer at Freetrade.
Shares fell 3 per cent to 116.8p after rallying around 70 per cent over the past year.
Vodafone warned of ‘uncertainties’ over the outlook caused by the Middle East conflict but expects earnings to rise to between €11.9 and 12.2billion.
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