Markets

PREVIEW: Vodafone Group may face 'Brexit' grilling

Mobile phone group set to take hit from EU's new roaming charge clampdown
Vodafone shop
Vodafone is switching to reporting its results in euros rather than sterling

Investors will be interested to hear any further comments on 'Brexit' from Vodafone PLC (LON:VOD) when the mobile phone giant updates the market on Friday.

Vodafone has already said it may move its headquarters out of the UK because it only does about 11% of its business in Britain and needs to be in the EU.

It also said recently that it was switching to reporting its results in euros rather than sterling.

Deutsche Bank said group organic service revenue growth of 1.9% in the first quarter would mark a slowdown on the 2.5% in the fourth quarter last year.

That quarter's figures benefited from accounting changes and a leap year.

Those benefits will not affect the first quarter's figures, which are also likely to take a hit from the EU's roaming rate price cuts.

The German bank's analysts said in a note: "Excluding these effects, Vodafone Group continues on an improving growth path in Europe with both volume and price trends encouraging.

"Whilst individual markets may move backwards near-term (eg. the UK), we view the broad trend for further top-line recovery in FY17 alongside a healthy yield, as likely to boost Vodafone's rating.

"We reiterate our 'buy' rating and upgrade our target price and estimates in GBP (TP +10p to 310p).

Meanwhile, African gold producer Acacia Mining PLC (LON:ACA), formerly known as African Barrick Gold, is set to report half-year results including production.

Numis Securities said: "We expect production of 78koz at Buly, 75koz at Mara and 46koz at Buzwagi with group production of 199koz with group cash costs of US$747/oz.

"We expect pre-tax earnings before interest, depreciation and amortisation (EBITDA) of US$90mln and EPS of nine cents per share.

"The operational focus should be the ongoing turnaround at Buly with dilution and metres of development being key, in addition to any commentary around the exploration work that is ongoing to bring areas of the upper east back into the reserve.

"There may also be an update on progress on government relations, specifically in relation to the tax dispute that resulted in the company increasing its tax provisions by US$70 million in Q1, principally due to a US$41 million dispute relating to a tax tribunal judgement on dividend withholding tax."

Other companies set to report include:

Interims: Beazley

Annual meeting: Big Yellow; KCOM; Telecom Plus; United Utilities.


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