Vodafone indicates group UK HQ is at risk after EU exit vote

Vodafone became the latest company to warn it could move its group headquarters from the UK following the country's decision to leave the European Union.

Various press reports quoted the operator as saying it could make the move if negotiations for an exit or "Brexit" do not ensure freedom of movement for people, capital and goods.

Although it is headquartered in the UK with offices in Paddington in London and Newbury in Berkshire, Vodafone operates a total of 26 national companies around the world of which 14 (including the UK and Turkey) are in Europe. It also provides enterprise services in the Americas and operates a partner market affiliate in Australia. Through its partner market programme it is present in a further 58 countries around the globe.

In a statement sent to national media outlets including the Guardian and the Independent as well as FierceWireless:Europe, the company said European businesses produce 55 per cent of the group's annual EBITDA, while the UK accounts for 11 per cent. The UK's membership of the EU had been an important factor in Vodafone's growth, the operator said.

"Freedom of movement of people, capital and goods are integral to the operation of any pan-European business, as are single legal frameworks spanning all member states," it added.

The Independent said Vodafone is the seventh-biggest company listed on the FTSE 100 index, with a stock market value of £55 billion (€67 billion/$74 billion). The paper added that a huge majority of Vodafone's 462 million customers, 108,000 employees and 15,000 suppliers are based outside the UK. It employs about 13,000 people in the UK.

The Guardian noted that if any move were made, it would affect the group's offices in London, rather than the Vodafone UK base in Newbury. Vodafone said it remained committed to supporting its UK customers and would continue to invest in its UK operating company in future. 

Ahead of the UK's EU referendum on Jun. 23, several major operators including Vodafone, BT and Three UK owner CK Hutchison had called for the UK to vote to remain in the EU.

In a research note issued just after the referendum result was announced, Jefferies described Vodafone as a "relative safe haven" for UK income investors, noting that with only 8 per cent of expected EBITDA in the fiscal year to end-March 2017 derived from the UK, "on our estimates, weaker sterling can have a material positive translation effect on sterling earnings."

For more:
- see this Guardian article
- see this Independent article

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