Vodafone is expecting to reach the top end of its full-year profit guidance, after its adjusted earnings increased by 5.9% year-on-year to €5.7bn.

For the six months to 30 September, the telecommunications firm also reported a 7.3% revenue increase to €19.6bn, reflecting strong service revenue growth and the consolidation of Three UK.

However, its operating profit fell by 9.2% to €2.2bn, as its adjusted earnings growth were offset by higher depreciation and amortisation following the Three consolidation.

Group chief executive at Vodafone, Margherita Della Valle, said: "Following the progress of our transformation, Vodafone has built broad-based momentum. In the second quarter we saw service revenue accelerating, with good performances in the UK, Türkiye and Africa, and a return to top-line growth in Germany.

"Whilst we have more to do, we delivered good strategic progress in the half year, driving further operational improvements across the business, expanding our customer satisfaction initiatives, and making a fast start in integrating the Vodafone and Three networks in the UK."

Vodafone now expects to reach the upper end of its earnings guidance range of between €11.3bn and €11.6bn. It is also set to record a free cash flow of between €2.4bn and €2.6bn.

Furthermore, Vodafone stated that in line with its ambition to grow the dividend, it is now committed to a progressive dividend policy, which reflects medium-term outlook for adjusted free cash flow growth. As a result, it now expects its full year dividend per share to grow by 2.5%.

Following this announcement, shares in Vodafone increased by over 6%.

Senior equity analyst at Hargreaves Lansdown, Matt Britzman, said: "Vodafone put on a confident face this morning, unveiling a new progressive dividend policy and guiding to the top end of FY26 expectations – the first signal that its self-declared growth phase is gaining traction. With pressure mounting ahead of the print, the return to service revenue growth in Germany marks a meaningful step in turning around its largest market.

"There’s still work to do, but the combination of upbeat commentary, improving momentum in the UK and Africa, and a stabilising European core should land well with investors. For a name priced for pessimism, today’s update offers a few glimmers of hope."

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