Group revenue was up 4.8% (3.5% Normalized) supported by Group service revenue growth of 5.0%.
The company added 5.9 million customers in the period, reaching a total of 116 million customers across the group.
Earnings per share were up 7.7% and headline earnings per share were up 8.9%, boosted by the once-off BEE costs of R1.5 billion (including transaction costs) being included in the prior period. An improved second half contribution from the Vodacom SA operations and growth in its International businesses in Africa contributed to an 8.9% increase in group headline earnings to 945 cents per share. EBITDA had a robust increase of 11.6% (2.3% normalized).
Vodacom declared a final dividend of 405cps.
A strong increase in Safaricom (which includes the M- Pesa financial services money transfer product in East Africa) is likely to be the next growth area for telecoms players. Total financial services customers was up 12.8%, to 53.2 million, adding 6 million customers in the year. The potential for additional growth in this area such as insurance and VodaPay, video, music, sports and gaming is a good prospect.
South Africa service revenue grew 2.3%, with data usage elasticity supporting recovery to growth in the second half. International operations delivered service revenue growth of 12.5% (7.1% normalized), with foreign currency translations boosting reported group growth.
Two major themes stood out: firstly, the sharp surge in data traffic subsequent to the reduction in data prices in South Africa last year. This resulted in an additional 1.9m SA customers. This resulted in an increase of 9.7% to 21.9m users in the country, with the lower out-of-bundle rates a major plus factor.
Work from home is likely to be a theme even after the pandemic has peaked, with fewer employees needing to work (or only needing to partially work) from their offices. This is positive for data service growth.
The second piece of positive news was the final dividend of 405 cents, resulting in the total dividend for the year coming to 845 cents, an increase of 6.3%. This is in an era when many companies have either cut their dividend payments or bypassed them altogether.
The dividend yield is an attractive 6.5%, in a time when money market rates are at around 5%. These money market rates are likely to decline when the MPC meets to announce an additional cut in interest rates. The sector is likely to remain resilient with Vodacom generating free cash flow increased by 9.5%.
Management have shown the ability to deliver results, despite a tough regulatory environment in SA, in a competitive marketplace, backed by big Brother, Vodaphone UK, a significant shareholder.