Vodafone will cut its end-of-year dividend by half compared to the previous year’s pay out, as the firm stated "much more still needs to be done in the year ahead".

The telecommunications firm said its board is recommending total dividends per share of €0.09 (£0.07) for the year, which includes a final dividend of €0.045 (£0.04).

The announcement comes as Vodafone published its full-year results for the 2024 financial year, which saw group revenue drop by 2.5% to €36.7bn (£31.6bn).

The firm said that this drop in revenue was down to the disposals of Vantage Towers, Vodafone Hungary and Vodafone Ghana. The disposal of these subsidiaries in the 2023 financial year also impacted Vodafone’s operating profit, which decreased by 74.6% to €3.7bn (£3.18bn).

However, in this time, group service revenue increased by 6.3%, with its Europe, Africa and business sectors also growing in the 2024 financial year.

Group chief executive at Vodafone, Margherita Della Valle, said: "A year ago, I set out my plans to transform Vodafone, including the need to right-size Europe for growth. Since then, we have announced a series of transactions and we are now delivering growth in all of our markets across Europe and Africa.

"We performed slightly ahead of expectations in the financial year, with good organic service revenue growth of 6.3% and organic EBITDAaL growth of 2.2%. Our business division - a key growth driver - achieved 5.4% revenue growth in the fourth quarter.

"Much more still needs to be done in the year ahead. We will step up investment in our customer experience, improve our underlying performance in Germany and accelerate our momentum in business, whilst also continuing to simplify our operations throughout the group."

Looking toward the 2025 financial year, Vodafone said it expects its EBITDAaL to reach €11bn (£9.46bn), with a cash flow of at least €2.4bn (£2.06bn).

These figures exclude the financial results of Vodafone Spain and Vodafone Italy, which were sold in the last financial year.

Equity analyst at Hargreaves Lansdown, Matt Britzman, added: "It’s taken all year, but revenue growth across all segments in the final quarter was exactly what Vodafone needed to deliver.

"After shipping off underperforming businesses, Vodafone can now focus on growing its core markets, but investors will need to accept the fact that it's now a smaller business. That impacts the dividend, now set at a base of 4.5 cents per share for 2025, half of what the group delivered for the year just gone.

"Don’t confuse progress with a completed transformation, though. Vodafone is still facing plenty of challenges, from higher costs to a core German market that’s still under pressure. Growth in Germany returned in the fourth quarter, but regulatory changes are starting to hurt - this will be a key battleground over the coming year. The transformation is starting to take shape, but before getting too excited, markets will need to see sustained top-line growth over the coming year and a tighter grip on costs."

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