Demand for smartphones sees positive results for Vodafone

The Share Centre currently lists Vodafone as a ‘buy' for income seekersAs Vodafone announces its full year results that exceed expectations Graham Spooner, investment adviser at The Share Centre, explains what this means for investors.

"Mobile giant Vodafone announced a 3.2% rise in annual revenues and increased pre-tax profit from £8.67bn last year to £9.5bn - beating market expectations.

"The company's 26.4% increase in data sales shows the rise in demand for smartphones. Vodafone continues to maintain its leadership in this area through investment in the quality of its network.      

"Continued plans for growth were seen in emerging markets with service revenue in India increasing by 16.3% and by 28.9% in Turkey. This will continue to attract investors seeking international exposure.

"Ongoing economic difficulties affecting consumer spending has seen the company face challenging times in Southern Europe and it has booked a £6.15bn impairment charge on its operations in the region. However, investors shouldn't be too alarmed as Vodafone has a strong global presence and has performed well in other regions. This means it has not significantly damaged overall figures.  

"The 7.1% rise in the final dividend and its efforts to strengthen its position in a challenging UK market means we continue to recommend Vodafone as a ‘buy' for medium risk investors geared towards income. Investors will be keen to hear more about Vodafone's future sale of its 24.39% stake in Polkomtel and will be interested in the Verizon Wireless potential dividend that is expected in 2012.

"The world's largest mobile telecommunications company remains our preferred play in the sector that has continuing upward momentum."