Vodafone Might Exit UK Due to Brexit Vote
Vodafone the industry giant in Britain says it is considering closing its headquarters in the UK and taking it someplace else following the UK shock vote last week.
The loss of Vodafone, whose stock helps to anchor the FTSE 100, would hurt tremendously. The country is trying to come to terms with different economic consequences of their vote to exit the EU.
In a prepared statement, Vodafone said that the EU membership of Britain has been an important part of its growth. The statement added that EU principles, which include the freedom of movement of its peoples, goods and capital remains vital for companies that are regional.
However, the company statement added that it was not possible yet to draw firm conclusion with regard to its long-term decision on where its headquarters will be located.
Vodafone, whose headquarters for the group are located in London, said the overwhelming majority of its more than 462 million customers and more than 108,000 employees are not in the UK.
In Europe, the company earns more than 55% of its revenue before taxes in Europe, while just 11% comes out of Britain.
Tremendous uncertainties face British businesses following last Thursday’s shocking vote to leave the EU.
London now must establish all new trading relationships with major partners and must determine what the immigration status is for migrants from the EU currently working across the UK.
As far as Vodafone, shock from the vote last week and its aftershocks are being felt this week. Large banks a number of which run their operations for Europe in London are facing big headaches.
Moody’s the agency that places credit ratings on governments and businesses, warned that manufacturers, food producers and automakers in Britain might suffer from lower volumes and higher barriers to trade.
It added that increased regulatory risk would knock telecom companies, drug makers and airlines.
Homebuilders will be big losers as well. Analysts worry that a steep decline in the confidence of consumers will hurt sales of homes.
Foreign buyers could also find being in London not as attractive for their property investment.
Since Thursday’s vote in the UK, the FTSE 250, which is mostly made up of British companies that are mid-sized has plunged close to 10%.