Vodafone's transformation yields growth, boosts shareholder returns

Vodafone reported higher first-half revenue and profit, raised its full-year outlook, and announced a new dividend policy, citing momentum from its ongoing corporate transformation.

The British telecommunications company said total revenue for the six months to Sept. 30 rose 7.3% to 19.6 billion euros, while a key measure of profit, adjusted EBITDAaL, grew 5.9% to 5.7 billion euros.

Vodafone now expects to deliver results at the upper end of its full-year guidance ranges for both adjusted profit and cash flow, according to the company.

"Based on our stronger performance, we are now expecting to deliver at the upper end of our guidance range for both profit and cash flow, and as our anticipated multi-year growth trajectory is now under way, we are introducing a new progressive dividend policy, with an expected increase of 2.5% for this financial year," said Chief Executive Margherita Della Valle.

The new policy includes an expected 2.5% dividend increase for the current fiscal year, and the company said it would launch a new 500 million euro share buyback tranche.

The results were supported by a return to service revenue growth in its key German market during the second quarter, the company said.

The company also highlighted strong performances in the U.K., following its merger with Three, and double-digit growth in Africa.

However, reported operating profit fell 9.2% to 2.2 billion euros, which the company attributed to higher depreciation and amortization costs following the consolidation of Three UK.