Vodafone is looking beyond the prospect of an extended hit to roaming charges from the virus and will list its mobile masts next year, as chief executive Nick Read works to squeeze more out of company assets.
The company said the initial public offering for the tower unit is on track for early 2021 in Frankfurt, assuaging investors concerned that the pandemic would derail this plank in Mr Read’s strategy. Vodafone also said it was merging its towers in Greece with Wind Hellas. “Big picture, everything looks to be on track,” said James Ratzer, an analyst at New Street Research.
The unit, now called Vantage Towers, produces earnings before interest, tax, depreciation and amortisation of €680m, the company reported. That estimate seems to trail the €900m the company had flagged about a year ago, Mr Ratzer said.
The decision to list in Germany reflects the high share of tower assets from that country in the new company, and doesn’t have anything to do with Britain’s departure from the EU, Mr Read said in a conference call. Advisers had already been invited to pitch for the towers IPO, which was announced last year and was seen raising more than €2bn, at a valuation of between €10bn and €20bn.
Mr Read declined to put a value on the company, but pointed to the trading multiples of 27 to 28 times earnings before interest, tax, deprecation and amortisation enjoyed by Spanish tower rival Cellnex. Including the UK, which Mr Read said puts earnings at about €750m, a similar multiple on Vantage’s earnings could imply a value of about €20bn, according to Bloomberg calculations.