Vodafone (LON:VOD) could replace PwC as its auditor, Sky News has revealed. The move is related to legal action over the collapse of the retailer Phones 4U.
Vodafone’s share price has been steady in London this morning, having added 0.22 percent to 224.50p as of 09:12 GMT, underperforming the broader UK market, with the benchmark FTSE 100 index having added 0.80 percent to 7,358.97 points so far this morning. The group’s shares have added more than 17 percent to their value this year.
Vodafone could sack PwC
Sky News revealed over the weekend that Vodafone had alerted the world’s biggest accountancy firms that it may be forced to tender its multimillion pound audit contract because of the 2014 collapse of Phones 4U. The FTSE 100 group has reportedly told Deloitte, EY and KPMG in the last few weeks that it may ditch PricewaterhouseCoopers (PwC) amid the threat of litigation over the retailer’s demise.
The problem has arisen because of PwC’s dual role as auditor to Vodafone and administrator to the British mobile phone retailer Phones 4U. In the latter role, the auditor has been drawing up plans to sue the telecoms giant and other mobile phone operators over their decision to stop supplying Phones 4U prior to its collapse.
A source told the newswire that Vodafone had asked three of the ‘big four’ auditors to free themselves from potential conflicts which would prevent them from pitching for the role sometime next year.
Analysts on Vodafone
In ratings news, Royal Bank of Canada reiterated its ‘outperform’ stance on Vodafone today, with a price target of 270p on the shares. According to MarketBeat, the telecoms group currently has a consensus ‘hold’ rating and an average valuation of 245.74p.
Vodafone updated investors on it performance last month, lifting its earnings outlook, having maintained ‘good commercial momentum’ in the first half of its financial year.