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Seem to remember Joe garner trying to move everybody about with a view to closing multiple offices. That was 2014 ish . It didn't work then but I may do now . Difficult to understand the why the sp is low given the size if the divi. Must be the BREXIT effect.
That doesn’t seem like very much money for that site?
End of an era. JP driving cultural change and head office a big scalp. Consolidating 300 current locations to around 30 sites is logical given the regulatory framework.
But I do remember you could see St Pauls Dome (..whispering gallery) from the board room and was kind of comforting.
Interesting article. Simple logic.
The market was full of optimism about the prospects for BT (LSE: BT-A) following its acquisition of EE in early 2016. The share price was touching 500p and the market capitalisation was just shy of £50bn.
However, investor sentiment towards the FTSE 100 group has been badly eroded since. As I’m writing, the shares are trading at a new multi-year low of 188.5p and the market capitalisation is down to £18.7bn.
The question now is whether the company can recover from this slump, and whether the share price can ever return to 500p — a potential upside of 165% from the current level.
Unique position in the market
BT has so far failed to really exploit what I think should be a significant competitive advantage. Its acquisition of EE made it the only UK telecoms group that owns both fixed-line and wireless networks. In theory, this should give it a distinct edge. In the words of one analyst: “As the owner of both networks, it controls the upgrade schedule, so it knows what areas will first be built out with new services, whether that is fibre-to-the-home, G.fast, or 5G.”
In addition, its scale, cross-selling opportunities and potential for increased customer retention, should also be positive for growth and profitability. However, three years on from the EE acquisition, the group’s only managed to achieve modest benefits from its unique position in the market.
Clearly, many investors have become disillusioned about the company’s prospects. The shares are trading at just 7.7 times forecast earnings per share (EPS) of 24.5p for the current financial year. And the multiple drops to 7.4 next year on forecasts of 4% EPS growth to 25.5p.
This could prove incredibly cheap, if BT does indeed have a competitive advantage and is able to exploit it in the coming years. I think the advantage is real enough, and I also think there’s a good chance of new chief executive Philip Jansen successfully exploiting it.
BT poached him from payment processing company Worldpay where he built a reputation for managing change, and identifying where the business needed to invest to deliver strong profitable growth. He looks tailor-made for BT to me. But has the company got the balance sheet and cash flows to support bold investment?
Return to 500p?
At the end of last year, net debt stood at £11bn, and there was also a £7.2bn pension deficit. Net debt would actually have been half as high again under a new accounting rule that comes in this year, so the balance sheet is stretched.
Meanwhile, management has guided on free cash flow (FCF) for the current year of between £1.9bn and £2.1bn. FCF is the amount of cash left over after all essential costs (including servicing the debt and pension). The company’s vowed to maintain this year’s dividend at 15.4p (an 8.2% yield at the current share price). This will knock around £1.5bn from FCF, which does
BT sells off London head office for £210mln as 'transformation' continues
Once they go ex d DB's 175 is almost there.
The year low price (188.00p) was revisited this morning, and the share price could be heading towards new lows, as suggested by some brokers (DB: 175.00p). What is surprising, that there isn't an influx of buying, with a generous dividend available on Aug 08? Perhaps the recent Morgan Stanley comment is encouraging would be buyers to hold fast in anticipation of a further drop in share price before then?
... to a Capital Manager apparently.
Search for new HQ underway.
Redundancies underway to save £1.5bn.
However, no need to feel sorry for employees as they’re dying to go...lol.
Thanks. I’ll let you know how it goes.
...useful contribution to the debate.
I'm booking my PC in for a repair. It only seems to be able to display red text numbers.
I have just looked at the brokers' ratings section on this webpage. Morgan Stanley did in fact publish an Equal-weight / 250p rating on April 30, which has been changed to Equal-weight / 230p in today's note.
I hope to be invested in BT Group when its share price is well above the current Morgan Stanley prediction; however time ( at least 6 months ) and patience are now both supplied. I was invested in BT a few years ago, and have "dabbled" with BT to good effect since then. This is my first serious investment for a while, and I hope to secure a decent return plus dividends over the coming year.
My best wishes to all long-suffering BT investors; I hope that you are able to recoup your initial investment, and achieve a profit - one way or another.
BT Group were knocked lower by comments from Morgan Stanley, whose analysts told clients that while shares of the telecoms carrier did look "tempting" at their then current "low" level, they "saw no rush".
"Upcoming Ofcom regulation should clarify BT's new capex plans and future dividends, so an attractive sum of the parts angle could emerge". However, progress is slow and Morgan Stanley remain on the sidelines for now."
( There is no earlier comment or recommendation from Morgan Stanley in the "Brokers' notes" section on the BT webpage on the HL website ).
...useful contribution to the debate?
Dear oh dear, if you show me your portfolio, I will show you my mine. Pathetic.
Sounds like a good strategy.. I’m not far away from what you suggest although I don’t hold any of the shares you refer to and slightly more biased towards property.
So why does someone who can offer clear and rational thinking choose to constantly be critical of an investment he purports to hold (and potentially intend to buy more of), at any opportunity and from every feasible angle?
Why not sell? There’s plenty of other choices and surely based on your repeated negativity these don’t come anywhere near your ‘Top 25’?
I have no idea of in how many companies you have holdings. At a guess I would think that it would include Centrica, Royal mail, and Bab****.
A good balanced portfolio would have at least 25 holdings with no more then 50% invested in the UK. No single holding should be above 6%. I have 60% of my investments in stocks and 40% in property. I believe that to be a good balance.
Yes, yes of course, every organisation with intelligence is likely to be head hunting you... I think I may have missed the bit where you explained your reason for holding and why when you keep criticising this share you would be planning to buy more?
As you’re dying to know where else I’m invested, although sure you already know the answer, let’s play a game so you can prove how clever you are. To help you out, let’s start by you guessing how many other companies I have shares in.
I have been rumbled. It was supposed to be a huge secret that I am secretly working for DB. I feel very complimented that you believe that I have the ability to drive down BT's share price from £5 to 1.88 in just 3 years.
Please keep it a secret. To be very honest I am also working for Russian intelligence. Mosad and the CIA.
Go on blame everyone Ofcom, Deutsche Telecom, Brexit. Trump etc. The only thing that is certain is that it has nothing to do with your own for you very poor investment judgment.
I am dying to know where else your invested but I think I can guess.
It can go down 1.90. And it can go up a lot more than that.
I'm still curious. Why as someone who spends his life posting negative messages about BT would you still hold and why ever would you say you're going to buy in-other than as a means to point to a lower price?
Do you work for DB with responsibility for trying to make their prophecy happen by constantly trying to spread fear and doubt?
How low can it go? I thought it was 185 that's the level of my I buy order. Now I am not so sure.
Maybe Deutsche Bank was being very charitable when they said 175.
The spread trade of selling BT against buying Vod should have some legs.