After the Liberty Global results last night (see our take here), we now have the more detailed results from VMO2. With lower than expected FCF guidance, weak on-net subscriber trends, ongoing price competition across the market, cash out for spectrum and ongoing dividend upstreaming, we think the path back to 4-5x leverage could be a challenge. As a result, we remain Underweight on the bonds.
The FT is reporting that VMO2 is selling a further stake in CTIL to an infrastructure fund. The transaction multiple has not been disclosed, but we estimate could be as low as 15x – the lowest in recent years. In this Quick Take we discuss reasons for the discount and implications for VMO2.
After the initial results out from Liberty Global last night, we get more detailed results this morning from VMO2, so we are able to further analyse the disappointing guidance given for VMO2 which implies a higher cost base than previously expected to support the current revenue trajectory. In this note, we dive deeper into the implications of this and what it means for Liberty Global and Telefonica.
After the main set of results from Liberty Global last night, we now get the full set of results from VMO2, which include some encouraging signs in their fixed-line business. In this note, we assess the details, what is still needed in Q4 and also thoughts on their CTIL tower sale and how they keep to 5x leverage this year.
Last night we got the Liberty Global results, which includes a summary of VMO2 results, but this morning we get the fuller information on VMO2, so we are able to do a deeper-diver into their Q2 results, which we analyse here and to what extent future growth rates are still achievable based on the KPI trends reported.
This morning we now get the (more) detailed earnings release from VMO2 which help to give us better insight into the drivers behind their guidance of a £1.8-2.0bn dividend for 2023, which is >50% ahead of consensus - and also ahead of our £1.6bn estimate. We undertake a deeper dive into their results and we show how this should still keep leverage at 4.9x – similar to the end of 2022.
There is a significantly sized private/high yield Telecom universe, of which we already have direct coverage of c.80% and indirect coverage of a further c10%. In this new product, we pull together market data and commentary for this high yield telecom universe (>€155bn of gross debt), leaning specifically on our sector knowledge and expertise to provide context and outlook for all. We also look closely at the European FTTH overbuilder sector, which we believe will see more debt raises in the nea...
Virgin Media’s announcement to upgrade its network to FTTH could be read as drawing a clear line between cable operators sticking with the HFC path, notably Vodafone, and those taking the plunge with an FTTH migration as a move to counter incumbents upgrading their own networks.
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Virgin Media – O2 already reported its Q2 results and FTTP announcement earlier today, and Telenet also reported its Q2 results. These represent c.50% of Liberty’s value, which means more focus will now be on the Swiss results, and corporate announcements.
BT has been the best performing EU telco recently, doubling over the past 8 months, and we have been very bullish on the underlying Openreach thesis. However, at £2/ share, we now see better value elsewhere in the European telecoms sector.
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