The Investment Column: Vodafone looks to emerging markets for growth

ITM Power; Carluccio's

Our view: Buy

Share price: 175.3p (-1.6p)

Vodafone monitors the heartbeat of the world's major economies according to voice, data, messaging and broadband sales. The latest health check shows that everything appears in good shape. Arguably, anxieties brought on by the credit crunch have accelerated rather than curtailed use of mobile communications.

Vodafone, the world's largest mobile phone operator by sales, delivered a 16 per cent rise in revenue for the third quarter to last December of £9.2bn, ahead of expectations. Organic growth showed a 4.4 per cent improvement. It increased its mobile customer base by 10.8 million customers to 252 million. In November the company forecast full-year revenues of £34.5-£35.1bn with operating profits of £9.5bn-£9.9bn.

Vodafone did not revise the figures yesterday although they will come in higher if the euro continues to strengthen against sterling. About 60 per cent of total revenues and profits are in euros. If it continues to appreciate it could swell the outcome for the year by hundreds of millions of pounds. But Vodafone is not relying on currency movements to deliver market-pleasing results. There have been some notable performances across the group.

The European region picked up 3.1 million new customers during the quarter taking the total to more than 109 million.

Growth in emerging markets exceeded 13 per cent. The most recent acquisitions in India and Turkey turned in growth of 56 per cent and 26 per cent respectively. The US arm, Verizon Wireless, did not reflect turmoil in the economy with 54 per cent growth in messaging and data revenue.

While Vodafone has continued to grow its services it has also acted to keep a tight grip on costs. The shares have risen 30 per cent since bottoming out at 134p last year. They have further to go.

ITM Power

Our view: Speculative buy

Share price: 98p (+3p)

ITM Power floated in 2004 with the tantalising promise of developing hydrogen fuel cells. The growing demand for efficient forms of renewable energy has placed great pressure on ITM to succeed.

But so far no one is helping pay for the development work. That has been left to shareholders. ITM presents a convincing case for its technology but it still has someway to go.

The company's electrolyser technology is aimed at producing hydrogen from a combination of water and low-cost electricity.

ITM has adapted a Ford Focus to operate using pure hydrogen while BMW has developed its own hydrogen-powered cars but admits they are still 20-25 years from being on the road in significant numbers.

Latest half-year results show a widening of losses from £1.42m to £1.9m. A manufacturing glitch has now delayed further work on the bi-fuel car. The electrolyser which is the heart of the device has developed flaws under pressure.

ITM is burning cash at around £4m a year but with £29m in the bank is under no immediate pressure. But it badly needs firm evidence that its technology is suited to volume manufacturing.

Listed at 50p, the shares have been volatile, reflecting progress, or lack of it, at various times. At this stage they remain one for investors happy to take a punt on a renewable energy company finding a commercially successful product.


Our view: Hold

Share price: 130.5p (-6.5p)

Shares in restaurant operators are like front-line troops when times get tough. They are the first to feel the flak. So the sector has suffered badly from profit warnings as people spend less on eating out.

The big issue for Carluccio's is whether it is sufficiently different from other eateries to weather the storm. The signs look reasonably encouraging. The company, which runs authentic Italian style restaurants with integrated food shops, said conditions are more challenging than a year ago but still pushed up sales by 18 per cent in the 16 weeks to January 13.

That is robust in present conditions. Carluccio's does offer a different experience. Punters spend an average £12 a head so a visit will not break the bank.

While some rivals have mothballed opening programmes it plans to open five more outlets this year – two in prime sites such as Heathrow's Terminal 5 and St Pancras International terminal – on top of the 34 already trading. Two sites, in Leicester and Bristol, have also been lined up for 2009.

Despite over optimistic forecasts about the resilience of the eating out market it is vulnerable when discretionary spending is under pressure. Carluccio's weakened yesterday where it sells on 17 times forecast earnings for 2008. A fairly safe hold.

Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
sportDidier Drogba returns to Chelsea on one-year deal
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Dejan Lovren celebrates scoring for Southampton although the goal was later credited to Adam Lallana
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
ebookA unique anthology of reporting and analysis of a crucial period of history
Rhys Williams
commonwealth games
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform