TLDRs:
- Vodafone shares rise 5% as dividend and buyback plans boost investor confidence.
- FY26 outlook upgraded, targeting upper-end EBITDAaL €11.3–€11.6bn.
- Germany, UK, and Africa markets show improving revenue momentum.
- AI assistant “SuperTobi” operational across Europe, enhancing service efficiency.
Vodafone Group plc (LSE: VOD) surged on the London market Tuesday, as investors reacted positively to its half-year results and strategic announcements.
Shares climbed approximately 5% to reach roughly 94p intraday, contributing to a record high for the FTSE 100 index. The uptick followed news of a new progressive dividend policy, the initiation of a €500 million share buyback, and an upgraded outlook for fiscal year 2026.
Progressive Dividend Signals Confidence
For the first time in eight years, Vodafone announced an increase in its full-year dividend. Under the new progressive dividend framework, management expects a 2.5% uplift in FY26 per-share payouts, with the interim dividend holding at 2.25 eurocents. The ex-dividend date is set for 20 November 2025 for ordinary shares, with payments due on 5 February 2026.
The dividend move represents a clear signal to shareholders that Vodafone is prioritizing predictable cash returns alongside ongoing investments and operational growth.
Analysts say this marks a turning point in the company’s capital allocation strategy, balancing shareholder rewards with long-term business development.
€500 Million Buyback Underway
Vodafone also initiated a new €500 million share repurchase program, running from 11 November 2025 to no later than 4 February 2026.
The buyback complements the €3.0 billion in repurchases completed since May 2024 and is intended for capital reduction, with shares to be held in treasury for future cancellation or employee awards.
Investors welcomed the move, viewing it as a demonstration of management’s confidence in Vodafone’s financial strength. Buybacks, combined with a progressive dividend, reinforce the company’s commitment to delivering consistent returns to shareholders while optimizing its capital structure.
Growth Across Key Markets
Operational highlights show momentum building across Vodafone’s major regions. In Germany, service revenue returned to growth (+0.5% in Q2) after a period of regulatory-driven reset, with 10.5 million 1&1 customers migrated to Vodafone’s network.
In the UK, post-merger integration with Three has proceeded rapidly, with over 5,000 network sites upgraded and Q2 organic growth of +1.2%.
Africa continues to be a standout performer, with service revenue up 13.5% in Q2, fueled by data and financial services adoption. Meanwhile, Vodafone Business grew 2.9% organically, reflecting rising demand for digital solutions. These regional gains underpinned the company’s confidence in targeting the upper end of its FY26 guidance.
Meanwhile, Vodafone’s GenAI assistant, “SuperTobi,” is now live across all European markets, achieving a 70% end-to-end resolution rate. The tool is designed to streamline customer service processes, reduce costs, and enhance overall user experience. Analysts note that AI deployment at this scale supports Vodafone’s integration efforts, particularly in post-merger UK operations, while also providing measurable efficiency gains.
Outlook and Market Reaction
Vodafone expects FY26 adjusted EBITDAaL of €11.3–€11.6 billion and adjusted free cash flow of €2.4–€2.6 billion, targeting the upper end of previous guidance.
Group revenue for H1 FY26 rose 7.3% to €19.6 billion, with organic EBITDAaL growth of 6.8%. Operating profit was €2.2 billion, reflecting amortization and consolidation impacts.
The market response has been overwhelmingly positive, with shares climbing ~5% on the day. Broader risk appetite, a weaker pound, and strength in the telecom sector contributed to the FTSE 100’s record-setting performance. Investors are viewing Vodafone’s combined dividend, buyback, and operational momentum as a compelling cash return story, signaling growing confidence in the company’s medium-term turnaround.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
