“The shares have enjoyed a strong rebound in recent months so it was no great surprise to see a pullback today,” Forrest reflected.
However, although the company “has a strong balance sheet,” competition in its sector is fierce and falling real wages in the UK means the shares are no better than a ‘hold’,” said Forrest.
He recommends competitor Carnival to investors interested in the sector, citing “strength in earnings and long term growth potential in Asia.”
Vodafone, another company hit hard after Brexit, and a big holding in many UK equity income funds, also sustained a loss of €6.08bn for the year ended 31 March 2017. That’s 18.7% higher than its €5.12bn loss in 2016.
Adjusted EBIDTA was also disappointingly flat on a reported basis, at €14.1bn.
Group revenue for the year was also down by 4.4% to €47.6bn, chiefly due to foreign exchange movements.
However, organic profit growth of 5.8% and organic service revenue growth of 1.9% helped its share price to rally on Tuesday.
Shares were up 3.79% to 219.1p, at the time of writing, the highest they have climbed since late October 2016.
The telecoms firm also managed to boost free cash flow to €4.06bn from €1.27bn and treated shareholders with a 2% dividend hike to 14.77c.
Group chief executive Vittorio Colao stated that the group expects to sustain its momentum in the coming financial year.
“Sustained investment in network quality has provided the platform to offer more generous plans to our mobile customers in Europe, stabilising contract ARPU, and has allowed us to capture strong data growth in our emerging markets operations.
“We continue to be Europe’s fastest growing broadband provider, seizing the opportunities created by convergence and winning revenue market share, supported also by our enterprise business which continues to outperform its peers,” he told shareholders.
