Vodafone PLC (LON:VOD) has indicated mobile mast business Vantage Towers will be positioned as an income generator when it lists early next year.
In a statement ahead of a capital markets day, Vodafone said Vantage Towers’ policy would be to pay out 60% of its recurring cash flow as dividends.
That would amount to €280mln in the current year to end March 2021 based on current forecasts of cash flow.
Vantage Towers generated revenue of €479mln in the six months to end September, which it described as a good first set of results since its formation in July.
The business, which is one of the largest mobile tower owners in Europe, posted underlying profits of €267mln in the half-year.
It also forecast underlying profits for the full year of €530-540mln with revenues of €955-€970mln and free cash flow of €375-385mln.
Vodafone said yesterday it expects Vantage Towers to float early in 2021 with the mobile phone giant to be the group’s anchor tenant.
Currently, it has 68,000 macro sites and 6,000 micro sites across nine markets with commitments for 7,100 additional sites.
Vivek Badrinath, Vantage's chief executive, said : “People and businesses across Europe need more and better connectivity.
“The growth potential in the towers sector is fueled by the requirement for data as well as the roll-out of 5G technology and new and wider network coverage obligations across Europe.
“With inflation-linked revenue - secured for the long term - from Europe's leading mobile operator Vodafone and other high-quality investment-grade tenants, and a strong balance sheet, we have a powerful base."