Vodafone maintains forecasts as revenue is supported by growth in the UK and Africa

Vodafone expects to hit full-year guidance after strong sales growth in the UK and Africa in the first quarter.

The telecommunications giant’s total revenue rose 2.7 percent on an organic basis to 11.28 billion euros in the three months ended June 30, compared with the same period last year.

Growth was held back by the loss of tens of thousands of cable broadband and TV customers in Germany, its biggest market, as a result of regulatory changes introduced in December.

However, this was offset by a strong performance in the UK, where service revenue jumped 6.5 per cent amid an increase in the value of annual contracts and the addition of 18,000 mobile customers and 22,000 extra broadband subscribers.

The FTSE 100 group also benefited from the possibility of reinstating roaming charges for Britons traveling within the European Union, as well as higher income from mobile towers.

Another strong result was reported at Vodacom’s South African division, which was supported by increased demand for insurance services and continued growth in the number of people using the M-Pesa money transfer platform.

The Newbury-based business therefore expects to report adjusted underlying profit of between €15bn and €15.5bn for the current financial year.

Its chief executive, Nick Read, said: “While we are not immune to the current macroeconomic challenges, we are on track to deliver financial results for the year in line with our guidance.

“Our immediate focus on our operational and portfolio priorities remains unchanged.

“We have made significant progress in stabilizing our commercial performance in Germany and we continue to actively pursue opportunities with Vantage Towers and strengthen our market position in Europe.”

Vodafone’s results come ahead of tomorrow’s annual general meeting, where Reid could face a backlash over his proposed £4.1m compensation package, a £600,000 increase on last year.

PIRC’s shareholder adviser urged investors to vote against the proposed payout, saying it was “unacceptable” given how much the company’s share price had fallen while he was in charge.

After taking over from Vittorio Colao in October 2018, Vodafone shares have fallen by about a fifth, while over the past five years they have fallen by 42.5 percent. This morning they remained at £1.29.

However, two other institutional advisers, ISS and Glass Lewis, have expressed support for Read’s proposed remuneration package and believe the vast majority of shareholders will vote in favor.

Victoria Sholar, Head of Investments at Interactive Investor, said: “Long-term investors in Vodafone have had a tough time with the stock struggling since its 2015 peak.

Still, she noted, “stocks are trying to recoup at least some of those losses, with shares outperforming the broader market since March lows, up about 10 percent from lows.”