Shares in Vodafone climbed by almost 3% on Friday morning (22 July 2016) after the mobile operator posted a better-than-expected increase in first-quarter revenue for 2016. In the three months to 30 June, the FTSE 100-listed group posted a 2.2% year-on-year increase in organic service revenue –higher than the 1.9% that analysts expected.
In the final quarter of 2015, the company reported growth of 2.5%, although that was aided by having an extra trading day in February, while underlying growth stood at 1.8%.
The increase meant the company has now reported an increase in its main growth measure for the eight consecutive quarter. Vodafone, the world's second-largest mobile phone operator, attributed the positive performance to a strong display in Germany and Spain, which recorded growth of 1.6% and 1.3% respectively.
The company's European markets, which only returned to growth in the final quarter of the last financial year, performed better than expected, growing 0.3% year-on-year against forecast for flat result.
The gains came despite the impact of cuts in roaming charges and despite a disappointing performance in the UK, where growth fell 3.4% compared to the corresponding period in 2015. The company has switched to reporting in euros from pounds, reflecting the bigger exposure to its combined European markets, and also hinted at the possibility of relocating its headquarters away from the UK after Britain voted to leave the European Union last month.
Vodafone also recorded better-than-expected result in Africa, Middle East and Asia-Pacific, with revenue across the regions growing 7.7% compared with the 7% analyst had expected. Group chief executive Vittorio Colao said the company was making good progress and the outlook remained positive.
"In Europe, our growth remains stable despite regulatory pressure on roaming revenue, with good performance in Germany, Spain and Italy while we are focused on improving our performance in the UK," he said.
"Our growth momentum in AMAP remains strong, with excellent performance in South Africa, Turkey and Egypt and ongoing recovery in India."