Mobile phone giant Vodafone unveiled an 87% jump in full-year profits today, and said 'voracious' global expansion was the secret of its success.
The world's largest mobile phone group, which recently acquired Eircell here, said pre-tax profits soared to £4.03 billion in the year to March 2001, from £2.15 billion last year. Turnover grew 29% to £21.43 billion, while proportionate earnings, which factor in Vodafone's major acquisitions, grew 28%.
However, on a pre-tax basis, the firm made an £8.1 billion pre-tax loss after a goodwill amortisation charge of £11.88 billion related to acquisitions.
With its rapid expansion into more than 30 countries worldwide, Vodafone now boasts 83 million proportionate customers, from 55 million a year ago.
Over half a million Irish people own Vodafone shares following the company's recent takeover of the Eircell mobile phone network from Eircom.
'This business is thundering along at a huge rate,' said chief executive Chris Gent. 'Not many companies can put on nearly 30% turnover growth and EBITDA (earnings before interest, tax, depreciation and amortisation) growth of 28%. We have objectives to sustain performances of a similar kind over the next couple of years'.
He said that the strong results proved that Vodafone's strategy of swift expansion is paying off. In the past year alone, Vodafone has snapped up assets in Ireland, China, Japan, Kenya, Mexico, Spain and Switzerland - not to mention the completion of its bold move to swallow German giant Mannesmann earlier last year.
'These results show the positive benefits of the effective integration of the recent acquisitions of both Mannesmann and AirTouch and the first year of trading for Verizon Wireless,' Gent said. Vodafone bought US outfit AirTouch in 1999, and last year set up Verizon Wireless with US group Verizon.
Vodafone has financed its strategy by issuing new stock, so that debt has remained at a manageable level - unlike some of its competitors such as BT.
But there remains a fear that the stock it has issued may at some stage flood back into the market, depressing the share price. In London this afternoon, Vodafone shares were down over 3% to just over 190 pence sterling by 3pm.
Gent indicated that Vodafone would ease up on the acquisitions in the future and try to wring better performance out of the myriad assets that it has bought.
'Acquisition activity should be less than it has been in the last two or three years,' the chief executive said. 'The acquisitions of the last two to three years have been part of a carefully worked through strategy to get us to a position of even greater competitive advantage for our customers,' he said. 'What we now have to do over the next couple of years is continue the process of maximising benefits for our customers.'
Having spent billions on third-generation mobile assets and licences, Vodafone is now gearing up for a pilot package of services that will bring the Internet to mobile phones. Vodafone said the general packet radio services (GPRS) - 2.5 generation - would be widely available later this year.
