Vodafone keeps Verizon dividend as profits dip

Mobile phone giant Vodafone has unveiled a dip in annual profits on the back of a plunge in revenues across southern Europe, and said it would keep a £2.1 billion dividend from its US joint venture rather than return it to shareholders.

The group, which is at the centre of intense speculation over whether it will sell its 45 per cent stake in Verizon Wireless to its joint venture partner, said underlying pre-tax profits for the year to March fell 3.1 per cent to £13.3bn.

Revenues dropped 4.2 per cent to £44.4bn, as a 2.8 per cent increase in northern and central Europe was offset by a 16.7 per cent drop in southern Europe.

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Vodafone received a £2.4bn dividend from Verizon Wireless in December and said a further £2.1bn payment, due in June, will be “retained in the business”.

Chief executive Vittorio Colao refused to discuss the possibility of US telecoms group Verizon buying out Vodafone’s stake, adding: “If there were anything to announce we would announce it.”

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: “Vodafone’s decision to stay put continues to reap measurable rewards, quite apart from the value of its stake appreciating by the year.”

The board proposed a final dividend of 6.92p a share, giving a total payout of 10.19p, up 7 per cent on last time.

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