Vodafone 2014 Annual Report Download - page 103

Commentary on the consolidated statement of changes in equity
The consolidated statement of changes in equity
shows the movements in equity shareholders’ funds
and non-controlling interests. Equity shareholders’
funds decreased by £0.7 billion as the prots on the
sale of our investment in Verizon Wireless (‘VZW’) and
from the recognition of a large deferred tax asset were
offset by the return of value to shareholders, regular
ordinary dividends and goodwill impairment charges.
The major movements in the year are described below:
Redemption and cancellation of shares
We cancelled 1 billion ordinary shares that had been repurchased by the
Company and held as treasury shares.
Purchase of own shares
We initiated a £1.5 billion share buyback programme following the
receipt of a US$3.8 billion (£2.4 billion) income dividend from VZW
in December 2012. Under this programme, which was completed
in June 2013, the Group placed irrevocable purchase instructions with
a third party in the prior year to enable shares to be repurchased on our
behalf when we may otherwise have been prohibited from buying in the
market. This led to a total of 552,050 purchased shares being settled
in the current year at an average price per share, including transaction
costs, of 189 pence.
The movement in treasury shares during the year is shown below:
Number
Million £m
1 April 2013 4,902 9,029
Reissue of shares (104) (194)
Receipt of shares re-purchased in
prioryear 552 –
Cancellation of shares (1,000) (1,648)
Share consolidation (1,978) –
31 March 2014 2,372 7,187
The reissue of shares in the year was to satisfy obligations under
employee share schemes.
Issue of B and C shares
On 2 September 2013 Vodafone announced that it had reached
agreement to dispose of its US Group whose principal asset was its 45%
interest in Verizon Wireless for a total consideration of US$130 billion
(£79 billion).
Following completion on 21 February 2014, Vodafone shareholders
received all of the Verizon shares and US$23.9 billion (£14.3 billion)
of cash (the ‘Return of Value’) totalling US$85.2 billion (£51.0 billion).
The Return of Value was carried out through a B share and C share
scheme. Eligible shareholders were able to elect between receiving one
B share or one C share for each ordinary share that they held.
The B shares were cancelled by Vodafone in return for cash and Verizon
shares with a value no greater than the aggregate nominal value of the
B shares.
Holders of the C shares received a special dividend on their C shares,
consisting of cash and Verizon shares with an aggregate value, for each
C share, equal to the aggregate value of cash payable and Verizon
shares receivable on the cancellation of each B share. The special
B share distribution and C share dividend of £35.5 billion is included
within the £40.6 billion of dividends described paid to equity
shareholders in the year.
Transactions with non-controlling stakeholders in subsidiaries
During the year we acquired further non-controlling interests
in Vodafone India Limited and commenced the legal process
of acquiring the remaining shares in Kabel Deutschland.
Comprehensive income
The Group generated £56.7 billion of total comprehensive income
in the year, primarily a result of the prot for the year attributable
to equity shareholders of £59.3 billion. Total comprehensive income
increased by £56.0 billion compared to the previous year; the primary
reason underlying the increase being the prot realised on the disposal
of our investment in VZW of £45.0 billion and the prot arising from the
recognition of signicant deferred tax assets of £19.3 billion in relation
to losses incurred in Germany and Luxembourg (further details are
provided in note 6 “Taxation” to the consolidated nancial statements).
Dividends
Dividends of £40.6 billion include the special £35.5 billion B share
distribution and C share dividends distributed as part of the Return
of Value to shareholders and £5.1 billion of equity dividends.
We provide returns to shareholders through equity dividends and
historically have generally paid dividends in February and August
in each year. The directors expect that we will continue to pay dividends
semi-annually.
The £5.1 billion equity dividend in the current year comprises £3.4 billion
in relation to the nal dividend for the year ended 31 March 2013 and
£1.7 billion for the interim dividend for the year ended 31 March 2014.
This has increased from total dividends of £4.8 billion in the prior year,
with increases in the dividend per share more than offsetting reductions
in the number of shares in issue.
The interim dividend of 3.53 pence per share announced by the
directors in November 2013 represented an 8% increase over last
year’s interim dividend. The directors are proposing a nal dividend
of 7.47 pence per share. Total dividends for the year, excluding the
Return of Value in relation to the VZW disposal increased by 8%
to 11.00pence per share.
The nancial commentary on this page is unaudited.
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