Shareholders of Vodacom Group are set to receive hefty rewards following the Vodafone-owned group’s financial performance in the 2022 financial year, which saw revenue climbed 4.5% to R102.7-billion.
Vodacom will pay a final dividend of R7.9 billion withholding tax to its investors. The company paid an interim dividend in half-year and took the total dividend to R8.50 a share, up 3% to R15.6 billion total disbursement to shareholders.
But the company said that since the financial year ended 31 March 2013, the board has maintained its dividend policy of paying at least 90% of adjusted headline earnings, excluding the contribution of the attributable net profit from Safaricom.
“In addition, the group distributed any dividend it received from Safaricom, up to a maximum amount of the dividend received, net of withholding tax. Looking ahead, the acquisition of Vodafone Egypt and an up to 40% stake in Community Investment Ventures Holdings (Proprietary) Limited’s (CIVH) fibre assets, provides a compelling opportunity to accelerate our System of Advantage and the Group’s growth profile,” Vodacom informed investors.
“Mindful that these deals will utilise debt capacity and while also wanting to retain headroom to invest into growth areas, the Board considered it appropriate to review the current dividend policy. Accordingly, on completion of the Vodafone Egypt acquisition, the Group intends to amend and simplify its dividend policy and institute a policy of paying dividends of at least 75% of Vodacom Group headline earnings.
“The simplified policy and proposed acquisitions combine to provide a high pay-out on enhanced growth prospects. Notwithstanding the change in dividend policy, Vodacom Group will still have one of the highest dividend pay-out policies on the JSE. Additionally, the policy provides scope for the Group to invest within its 13 – 14.5% capital intensity target, de-lever the balance sheet and accommodate the upstreaming and dividend pay-out profiles of Safaricom and Vodafone Egypt.”
Future plans
In addition to focusing on the closure of the proposed acquisitions, and the expansion into Ethiopia, Vodacom said its priorities in the year ahead will include scaling our super-apps, deeper penetration of financial services and delivering innovative products to assist customers with the higher cost of living.
The coming financial year also promises to be significant in the lives of the South African consumer now that the long-awaited spectrum auction has concluded in March 2022 and is expected to contribute to the long-term sustainability of the industry in Vodacom Group’s largest market, the comnpany said.
“In addition to accelerating our rural coverage programme and fast-tracking the roll-out of our 5G network, access to high-demand spectrum will result in even faster data connectivity and will ultimately assist in delivering greater value for customers, who have already benefitted from a 43% drop in headline data prices since 2020 and our R50 billion investment in infrastructure over the past five years alone.
“In building resilience of our networks to cope with significant increases in mobile data traffic volumes, enabling businesses to operate, facilitating online learning and assisting governments in providing critical services, we invested R14.6 billion into capital expenditure across the Vodacom Group markets, helping underpin the 3.0% (4.6%*) increase in Group service revenue.
“In particular, I am also pleased with the growth of our Group financial services and Internet of Things divisions in an increasingly difficult trading environment. The strong operating results supported a 3.0% increase in full year dividend to 850 cents per share, a testament to having the right strategy in place and the manner in which the Group and its employees adapt to crises while at the same time resolutely delivering on our purpose-led ambitions.”
