By Steve Goldstein, MarketWatch
Vodafone Group shares surged in London trade on Tuesday as Europe’s leading mobile operator dashed fears it would have to cut its dividend.
Vodafone Group /zigman2/quotes/202484985/delayed UK:VOD -0.49% /zigman2/quotes/202862751/composite VOD -0.20% shares climbed 8% as it swung to a profit for the March 31-ending fiscal year and it said the current year’s adjusted operating profit may be flat to slightly down. The outlook was for 1% growth in adjusted operating profit.
Vodafone kept its dividend payment steady as its financial leverage of 2.8 net debt-to-adjusted earnings before interest, taxes, depreciation, and amortization was within its target of 2.5 to 3.
“Given the dividend cuts seen across the broader market but also within the European telecoms sector, we think investors were wary of potential cuts at Vodafone,” said UBS analyst Polo Tang.
Analysts at Bank of America said Vodafone’s restructuring was moving ahead, with a sale of its Egypt arm and monetization of its towers infrastructure on track.
The Vodafone news helped the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.59% rise 0.7%, even as some other European stock market indexes fell.
Land Securities /zigman2/quotes/207145631/delayed UK:LAND -1.06% dropped 15% as the commercial property developer reported a widening loss and said its net assets value per share fell to 1181 pence from 1341 pence. The real-estate investment trust also didn’t make a final dividend payment and took a £23 million provision against uncollected rent.