Vodafone’s shareholders will be rewarded with the first rise in its dividend in eight years as the European broadband and mobile operator upgraded its earnings outlook today after it returned to top-line growth in Germany.
Shares in the British company, which are trading at two-and-a-half year highs, rose 5% to 94 pence in early deals.
It slashed its dividend by 40% in May 2019 after the cost of buying 5G spectrum in Europe caused its debt to balloon.
Chief executive Margherita Della Valle said as well as an improved performance in Germany, where it had been hit by a change in TV subscription rules, Vodafone had made a fast start in bringing together the Vodafone and Three networks in Britain.
Vodafone completed the merger with Hutchison’s Three in May, becoming the UK’s biggest operator.
“In the second quarter we saw service revenue accelerating, with good performances in the UK, Turkey and Africa, and a return to top-line growth in Germany,” Della Valle said.
The company said it expected to deliver the upper end of it guidance ranges for adjusted core earnings of £11.3-11.6 billion and group adjusted free cash flow of £2.4-2.6 billion for the full-year.
Based on the stronger performance, the CEO said she would introduce a new progressive dividend policy, with an expected increase of 2.5% this financial year.