Vodafone is becoming a perpetual disappointment. A rally in the middle of last year proved short-lived, and now the company is really struggling in its key German market. 

VOD shares were down 5% at the time of writing after releasing Q3 results.

Vodafone has posted a 5.0% increase in total revenue to €9.8 billion for its third quarter, driven by organic service revenue growth, though partially offset by unfavourable foreign exchange movements. 

The telecommunications giant saw its group service revenue climb 5.6% to €7.9 billion, with organic growth of 5.2%, marking an improvement from the previous quarter’s 4.2%.

Group Adjusted EBITDAaL rose by 2.2% on an organic basis to €2.8 billion, although the adjusted EBITDAaL margin contracted by 0.5 percentage points year-on-year to 28.8%. 

However, for all the positivity around the top line and EBITDAaL, Q3 operating profit saw a significant decline of 18.4% to €1.0 billion.

The company’s financial performance was strong in some markets, with particular momentum in the UK and Africa. It was the slowdown in the key German market – accounting for 34% of Vodafone’s group service revenue – that was the major disappointment for investors.

German Market Headwinds Persist

The German operation continues to face significant challenges, with revenue declining by 7.6% to €3.1 billion in Q3. Service revenue in Germany contracted by 6.4%, slightly worse than the previous quarter’s 6.2% decline. 

This downturn was largely attributed to the impact of recent TV legislation changes affecting Multi Dwelling Units (MDU), which came into full effect in July 2024.

The German fixed service revenue experienced a particularly sharp decline of 10.7%, while mobile service revenue decreased by 1.0%. 

The implementation of a national roaming agreement with 1&1 has seen slower-than-anticipated customer migration, though this is expected to accelerate in coming quarters.

“After enduring their fair share of disappointment, Vodafone investors were treated to an upbeat trading update this morning as the telecoms giant looks to break free of the “one step forward two steps back” performance that has plagued the business in recent years,” said Mark Crouch, market analyst at investment platform eToro.

“Internal cost cutting coupled with sales of underperforming assets mean Vodafone has boosted revenues while maintaining generous shareholder returns. However the mammoth task facing the company is by no means complete. With so much being pinned on a merger with Three UK, which has at last been given the green light, it is perhaps not surprising that investors haven’t poured in to invest, underlining the issues still facing the company. 

“Whether or not the deal goes through. Challenges remain for Vodafone. Unable to simply raise prices to prop up the balance sheet – something they’ve learned the hard way in Germany with declining customer numbers – Vodafone will need to come up with something other than asset sales and price hikes if they are ever to recapture their former glory.”

The FTSE 100 tracked global equities to the downside after Donald Trump imposed tariffs on Canada, Mexico and China, threatening a far-reaching global trade war.

London’s leading index was down 1.2% at the time of writing as traders assessed the implications for individual companies and sectors.

“Investors are rattled at the prospects of a full-blown trade war breaking out after the US slapped punishing tariffs on Canada, Mexico and China, prompting retaliation,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Investors are buckling up for a rollercoaster ride for the global economy, with the European Union expected to be next in line for punitive duties.”

The sharp reaction in stocks on Monday reflects an element of complacency in markets after Trump’s inauguration. Donald Trump had held off some of the most dramatic measures in the early days of his presidency, which cultivated a sense of relief that the worst of his campaign rhetoric would not be acted on.

Anyone positioning for this school of thought was humbled on Monday as US futures sank and Europe followed. That said, while the delines were pronounced, they were relatively contained, suggesting markets were pricing for some of the most damaging tariffs to be short-lived.

“Financial markets had assumed that Trump would talk tough on tariffs and back off when he got a deal, so the US president’s plan to act first and then (perhaps) talk has come as a nasty surprise to share prices around the world, especially as Canada and Mexico have already threatened retaliation,” says AJ Bell investment director Russ Mould.

“Trump’s launch of tariffs in 2018 did raise revenues for America but US corporate profits took a hit that year and America’s S&P 500 index fell by a fifth, so markets have understandably taken fright this time around.”

European and US car manufacturers were among the most heavily hit on Monday. The interconnectedness of the auto industry in North America means components move backwards and forwards across the border on many occasions.

Unsurprisingly, there were few gainers in London, with 90% of the FTSE 100 trading in negative territory.

The Scottish Mortgage Investment Trust was the top faller as traders reacted to a drop in the NASDAQ and the technology shares held in the trust’s portfolio. Copper miner Antofagasta was sharply lower as copper prices fell amid additional tariffs on China.

Elsewhere, there were broad declines in retailers, financials, miners, property stocks and engineering firms.

It appears the market is taking a ‘sell first, ask questions later’ to tariffs, with the impact on UK stocks not immediately obvious and uncertainty about whether Trump will strike closer to home in the coming weeks.

MicroSalt shares surged in early trade on Monday after the low-sodium salt technology announced forecasts for 2025 alongside an oversubscribed fundraise at current market prices.

The Tekcapital portfolio raised £2.3 million in an oversubscribed subscription to fund the development of a recently launched ‘Quick Service restaurant’ product, which the company sees as a ‘tremendous opportunity for growth’.

However, the most exciting takeaway from today’s RNS is that MicroSalt forecasts 2025 B2B volumes to increase more than 10 times the amount of low sodium salt manufactured in 2024. This represents a step-change in customer demand and suggests MicroSalt salt will be used in the production of millions, if not tens of millions, of individual food products.

MicroSalt said it had received orders for an additional 290 metric tonnes of low-sodium salt for 2025 already and expects this to increase.

Investors will also be delighted to hear the company has received positive feedback subsequent to the launch of the Quick Service restaurant and MicroSalt will target the massive french fry market. This development, should it result in the commercial reformulation of products, would open the doors to a market of billions of people globally that consume fast food products.

MicroSalt shares were 20% higher at the time of writing.

Investor confidence in MicroSalt was further demonstrated by the £2.3 million fundraising being completed at current market prices, with investors prepared to commit substantial levels of cash without demanding a discount to the recent share price.

“We are pleased to close this oversubscribed fundraising at the current market price, at a time when many other fundraisings are consummated at substantial discounts,” said Rick Guiney, CEO of MicroSalt.

“This additional capital will enable us to further scale our B2B sales to snack manufactures and help us meet anticipated customer demand in the QSR segment since our January 2025 product launch.

“I am very optimistic on the upside potential for anticipated rapid growth in 2025, particularly at a time when governments are increasingly focused on initiatives to reduce Sodium consumption in manufactured foods. Indeed, only last month the US FDA proposed new short form nutritional labels to be applied to the front of packaged foods where the levels of (i) Saturated Fat; (ii) Sugars; and (iii) Sodium are to clearly labelled as Low, Medium or High. For MicroSalt, this is potentially game-changing and we already have food companies engaging with us to actively address the need to lower Sodium levels in their products.” 

EnSilica shares jumped on Monday after the group announced a UK Space Agency contract win.

EnSilica, the British chip manufacturing specialist, has been awarded a substantial £10.38 million contract from the UK Space Agency to develop next-generation semiconductor chips for satellite broadband equipment.

EnSilica, which specialises in mixed signal ASICs (Application Specific Integrated Circuits), will focus on creating semiconductor chips for mass-market satellite broadband user terminals.

These terminals will be designed to interface with various satellite networks, including OneWeb and the European Union’s planned IRIS2 multi-orbit constellation.

The market for user terminals is projected to reach US$16.5 billion by 2031, and investors will be delighted that EnSilica is positioning itself early in the growth cycle.

Modern satellite terminals require hundreds of specialised chips to operate their electronically steerable antennae, highlighting the significant commercial potential of this project.

The funding has been allocated through the UK Space Agency’s Connectivity in Low Earth Orbit (C-LEO) programme, which maintains a total funding pool of £160 million over four years.

The programme aims to strengthen Britain’s position in the competitive global market for Low Earth Orbit satellite constellations by supporting the development of advanced satellite technology and hardware.

After a poor 2024 for EnSilica shares, investors will hope the relationship with the UK Space Agency develops over time.

EnSilica shares were 8% at the time of writing.