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VODA BOSS: WE’RE NOT GOOD ENOUGH
SHOCK AND AWE STRATEGY FAILS TO IMPRESS INVESTORS CITY A.M. REPORTER VODAFONE shares tanked seven per cent yesterday despite the firm’s new boss declaring the company “must change” and announcing 11,000 job losses. Margherita Della Valle, who took the job on a permanent basis only a few weeks ago, set out her new “roadmap for Vodafone” yesterday and said “the comparative performance (of the firm) had worsened over time”, even in a telecoms sector that has struggled more broadly for years. “We are more complex than we need to be,” the company said alongside full year results as Della Valle announced a widespread headcount reduction over the next three years. The telco giant announced disappointing results in Germany, Spain and Italy and whilst full year pre-tax profits of just
north of £11bn looked healthy on paper, they were artificially boosted by the £6bn sale of parts of its Vantage Towers business. Revisiting and reshaping the German business is considered a priority. The share price fell to a 16 year low. Vodafone is considering a deal with CK Hutchison, the owner of the Three mobile network, which would merge the two’s UK operations and create the UK’s biggest mobile network operator. But yesterday’s roadmap said the company would “rebalance” the organisation to maximise the potential of Vodafone Business, which has a strong position in a large and growing market as organisations digitise. “Lacklustre performance has been something markets have come to expect from Vodafone of late, and full year results Margherita Della Valle’s missive yesterday was brutal in its honesty
didn’t buck the trend. Higher energy costs and continued weakness in Germany meant underlying cash profit came in below the recently downgraded company guidance,” said Matt Britzman, an equity analyst at Hargreaves Lansdown. He said the plan “makes sense on paper, but markets will need to see tangible results over the coming year before they get more excited.” As an internal appointment with more than two decades of experience within Vodafone, Della Valle was something of a surprise choice to lead the firm’s transformation after the sudden departure of Nick Read in December of last year. Read had been under pressure from activist investors throughout his tenure, with Cevian amongst the most vocal critics. Vodafone’s struggles are not unique in the industry. BT’s share price has slipped 25 per cent in the past five years, compared to 54 per cent for Vodafone.
CITY OF LONDON SET TO DIM THE LIGHTS (literally, at least...) JAMES SILVER WITH London’s equity markets under pressure and business owners calling for the capital to become more globally competitive, you’d be forgiven for thinking the City is turning out the lights. And that will soon be happening literally, after the City of London Corporation signed up to a global standard on how cities should be lit – with a focus on embracing greener lighting techniques and minimising light pollution. The City Corporation has been
consulting on a separate policy which will require developers to submit a detailed strategy for how buildings are lit, and a Considerate Lighting Charter will also ask existing property owners and occupants to make a commitment to turn lights off when not in use. “Our strategy is aimed at ensuring an intelligent and sensitive approach to lighting that balances the safety and accessibility of the City with the preservation of local amenity and character,” said the Square Mile’s chairman of the planning and transport committee Shravan Joshi.
Treasury minister adds to calls to ‘attract brightest and best’ with high pay CHARLIE CONCHIE THE CITY minister yesterday threw his weight behind efforts to boost the pay packets of the country’s top bosses as a debate around pay in the City gathers steam. The compensation of executives at the UK’s top listed firms has been a
topic of hot debate in recent weeks as regulators and officials look to revive London’s status as an international business hub. In a speech yesterday on the UK’s status as a global financial centre, organised by financial services lobby group UK Finance, City minister Andrew Griffith backed a
reappraisal of executive pay. “Remuneration here needs to be competitive,” he said. “We want to – we need to – attract the brightest and best to the shores, and the last thing we want to do is to drive them away.” Griffith’s comments follow warnings from London Stock
Exchange chief Julia Hoggett earlier this month who said that attracting talent was “hampered by the advice and analysis of the proxy agencies and some asset managers voting against executive pay policies, even when those pay levels are significantly below global benchmarks”.
The warnings have been brought into sharp relief during this year’s AGM season after a series of shareholder rebellions and warnings from proxy groups. Glass Lewis called for shareholders to reject bosses’ pay plans laid out by FTSE 100 firms Unilever, Barclays and Rolls-Royce.
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