Vodafone becomes the FTSE’s top dividend payer

Vodafone shareholders will have some good news coming their way just in time for the holiday season. The Vodafone group has surpassed Shell to become the top dividend payer in the FTSE 100. The provider will be distributing funds totaling £6.7 billion to shareholders within this financial year. Part of the funds that make up the amount have been passed on from the US subsidiary of the firm.

Vodafone is one of the leading broadband providers in the UK, offering value for money plans on mobile broadband as well as introducing related technology such as the mobile broadband dongle that they launched last year.

Vodafone’s interim dividend increased by 7 percentage points at 3.05p per share. The firm announced their half-year results where revenues showed an increase of 4.1% to £23.5 billion, beating forecasts and predictions in the process. The broadband firm will be accounting for £1 in every £8 in dividend from the blue chip index, or 13% out of the total £51 billion that has been announced by various companies until the month of March next year. HSBC has promised £5, while Shell put forward £5.6 billion.

Vodafone will be handing out £4.7 billion in ordinary dividends during this financial year. An additional £2 billion will be paid out in January of next year, after the firm will have collected its distribution from Verizon Wireless.

Vittorio Colao, Vodafone’s chief executive, stated: “Vodafone is becoming a little more an emerging market company and a little bit less a European company.” He welcomed a “re-balancing” of the company’s income which is distanced from decreasing voice call revenues and saturated European markets. Moreover, Colao added that Vodafone should slowly shift its focus in the direction of faster-growing markets, as well as on the increased mobile data demands of its users. On a related note, a study conducted by Ericsson earlier had reported that such demand has been rising consistently, even doubling in terms of demand within the past twelve months.

The Vodafone group saw a 2.5% increase in their global subscribers, reaching 391 million users in the six months leading up to September. The firm saw huge increases in their user base in countries such as India, Egypt, and via African subsidiary Vodacom.

Source – The Guardian