Mobile phone giant Vodafone set an unwanted corporate record today after a review of its assets left annual losses at an eye-watering £14.85 billion.
The company said its operating performance had been good but a decision to write off £23.5 billion from the value of its assets, in particular its German acquisition Mannesmann, created the all-time high for a UK company.
Vodafone also cut 400 jobs at its Newbury headquarters in Berkshire and said other workers would leave its payroll as part of a five-year outsourcing initiative.
The world's biggest mobile operator is looking to cut costs as it faces up to intense competition and launches new services to take on fixed-line and broadband operators in lower margin markets.
Among its plans, Vodafone will launch a "homezone" offer which charges customers cheaper rates if they use their mobiles close to home. It will also begin to roll out services offering broadband connections.
Despite the massive loss, Vodafone shares rose 3% today as investors welcomed strong growth in operating profits and a 49% rise in the company's dividend.
Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, believed the figures may represent a turning point for the company after a difficult couple of years on the stock market.
He said: "Given the mauling that the share price has had over the last year - down 14% during which time the FTSE 100 has risen 16% - inevitably, some positive news was overdue."
In the annual results, Vodafone said it added 21.5 million users during the year to take its worldwide customer base to 170.6 million. Group revenues were up 7.5% to £29.4 billion in the year.
In the UK, where the company has 16.3 million customers, Vodafone said revenues were 0.3% lower in a market it described as being one of its most competitive. Operating profits in the UK were 10.4% lower at £698 million.
Across the group, profits before the write-down rose to £8.79 billion for the year to March 31, compared with £7.8 billion a year earlier.
The bottom-line figure of £14.85 billion compared with the previous low from the company of £13.54 billion in 2002, when it also reported a number of non-cash exceptional items.
Chief executive Arun Sarin said the underlying performance of the group remained good after outperforming its competitors in an "increasingly challenging marketplace".Reuse content