Annual Report – 31 March 1997 - Vodafone

Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 1997 - Review of results
The Group's net interest cost increased by £18.5m as borrowings increased by £473.1m to finance
acquisitions and fund overseas associate companies.
Taxation
The effective tax rate fell by 2.7% to 31.9% principally as a result of the utilisation of brought forward tax
losses. Excluding the effect of disposals, the effective tax rate fell by 1.7% to 33.5%.
Exchange rates
The movement of exchange rates had no material impact on the Group's operating profit.
Future results
Factors which will influence the Group's future performance include the growth of mobile
telecommunications markets, the Group's market share, revenue per subscriber, the costs of providing and
selling existing services and start up costs of new businesses.
In many of the overseas markets where the Group operates, cellular penetration is low, which should
enable the overseas businesses to grow more rapidly than the UK and make a substantial contribution to
Group profits.
The Group's strategy is to concentrate on mobile telecommunications services worldwide as strong
demand for these services is expected to continue. Geographic diversity and a strong financial base will
enable the Group to show continuing progress in 1997/98 through organic growth, product innovation and,
should suitable opportunities arise, acquisitions.
With the Group's prominence in the UK and international presence, it is well positioned to deliver
sustained growth and increased shareholder value.
Potential for growth
Population Market
(million) penetration %
UK 58.7 12.1
Australia 18.3 25.5
Fiji 0.8 0.5
France 58.1 4.8
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