Stubborn Gent

27 May 2003

It is Chris Gent’s last set of results. The mobile giant is neither writing down its 3G licences nor recycling cash. Gent’s successor inherits lots of room for manoeuvre and will find it harder to refuse to use it.

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Vodafone has again declined to make exceptional writedowns in the goodwill on its balance sheet, despite pressure from rival mobile operators' decisions to write off the swollen values of their thirdgeneration businesses. The global mobile group took a £14 billion amortisation charge in its 2002 preliminary results. That amount was in line with Vodafone's existing policy of amortising goodwill over a period between 5 and 10 years; including small acquisitions during the year, the group finished 2002 with £108bn of intangible assets, including goodwill, on its balance sheet, an increase of £2bn over the year before.

The mobile operator increased its fullyear dividend by 15%, to 1.69p, giving a dividend yield of 1.4%, at a total cost of £1.2bn. The dividend was over 4 times covered by Vodafone's adjusted earnings per share. Vodafone's operating free cash flow equal to net cash inflow from operations, less net capital spending was £5.8bn. During the year, the group spent a net £4.9bn on increasing its stakes in subsidiaries and associates.

This is the last set of results to be announced by Vodafone's chief executive Sir Chris Gent, who retires in July. His successor, Arun Sarin, is already shadowing Gent, and will chair Vodafone's annual strategy review in June.

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