Given talk of activist investor pressures, Vodafone is clearly focused on getting the right message to the market to show it isn’t sitting on its hands.
There is a big emphasis in its latest update on how it is trying to make more money from Germany, speed up its transformation in Spain and be ready to capitalise on the EU recovery fund.
On top of that, Vodafone has stressed that it is focused on creating value for shareholders.
“These are the kind of things that investors will want to hear, though activist Cevian Capital may argue that it’s all talk and not enough action,”said AJ Bell’s Russ Mould.
“It could be time for Vodafone to speed up its value generation efforts, and one way is to sharpen its focus on fewer areas rather than have fingers in so many pies.
“The simplification process has already begun without any activist pressure, but this is a slow-moving beast which could use some gentle prodding to speed along.
“One of the problems is that telecoms by its very nature is a pedestrian sector. That’s illustrated by Vodafone’s mere 2.7% growth in organic service revenue for the third quarter. Activists don’t like to wait around, preferring to look for the quick wins to help drive up business value.
“That could create a culture clash, so expect some fireworks between Vodafone’s management and Cevian if it does decide to take a more aggressive approach to pushing for change.”