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A green day, haven't seen one of them in a while!
UT closing price 114.70p, Right on the money Emmjane.
Close above here, which was close pre results, adds to the bullish technical sentiment
I think we will see more businesses moving their products \ services online as a result of COIVD-19. I expected this anyway but with lockdowns in place and companies wanting better protection in the future I think we'll see a massive shift now. All those business with online presence are doing much better than those on the high street. It was interesting to see Deutsche bank change position on 2 shares I have been buying for a couple of years now (BT / RMG). According to them RMG were worth 92p and BT 110p. It will be interesting to see where these share prices are 2 full years after Brexit.
Apart from anything else - everything is for sale at a price
Openreach is definitely up for sale. The for-sale signs were posted in the FT last week. Multiple reporters in multiple cities worked on that Openreach story. The FT does not mess about.
Openreach is the key to getting BT back to its current fair value around £3. Bag the 20 billion, pay down the debt and pension, and rollout fast-fibre and 5G for millions of homeworkers.
Fleccy..... "Nige, as you and anyone else who reads my posts know, i'm a BT bull. I don't see BT as a growth play with Fibre, BT is more of a cost cutting play around increasing Net Profit. It stands to reason that some of BT's business will be shared out around other players, so the rollout of Fibre is more about maintaining customer numbers. I believe that some of the players that rely on other providers for network, like Talk Talk and ZEN, will see thinner margins over time with possible consequences."
Fleccy, yes I know we have had this discussion previously and I fully appreciate your comments, and I respectfully appreciate your engineering background in telecoms. Yes I would also agree small players will take the budget customer away from BT. However, I still feel that more customers will want fibre broadband, this virus I think will bring it home especially for people working from home, reliability comes first, before cost. Customers would rather pay a little more for the best reliable service. So for this reason I think that BT will see future growth in fibre broadband. Just my opinion of cause. Time will tell.
Good post Capt. I have just sold off my HOC yesterday after that doubling and put it all in here as this looks way oversold. I hope this doubles and more too. I don't see why not as this price looks like a gift. Good to see the directors putting their money where their mouth is too...
Maybe early days yet,
but in a growth constrained world, the market is paying up for growth, or importantly even a hint of it.
By cutting its dividend and investing heavily in openreach, market consensus is currently forecasting that FY2021 will represent the low point in both revenue and ebitda, with both starting to increase from FY2022.
Importantly debt is forecast to increase much slower than capital expenditure, thereby setting up an 'asset' base for future earnings, and the pension liability is forecast to decline as well.
The market is forward looking, not backward looking.
If this does come to fruition, then paying under 4 times EV/EBITDA multiple will be considered very cheap, and the market will re-rate BT Group accordingly. (Just look at the EV/EBITDA multiples currently in the market for any stock with growth)
After a rough 5 years, now could well be the time to purchase additional positions. I have been buying very heavily in the last week, increasing my position by 500%. BT Group now represents a significant % of my portfolio at 10%.
'Putting your most valuable asset up for sale on the market stinks of asset striping.'
How many more times ? Openreach is not for sale either wholly or in part. Move on.
There are some articles suggesting that the Oxford Vaccine has failed in animal tests, but the headlines hide the positives. Something else the US seem interested in buying second dibs on it.
It appears the US has invested a $1 Billion for AstraZeneca to supply the Oxford Vaccine, not bad considering some headlines would have us believe it failed.
" AstraZeneca Gets $1 Billion From U.S. to Make Oxford Vaccine"
"BT will become a growth company withing this time period. Just my opinion of cause."
Nige, as you and anyone else who reads my posts know, i'm a BT bull. I don't see BT as a growth play with Fibre, BT is more of a cost cutting play around increasing Net Profit. It stands to reason that some of BT's business will be shared out around other players, so the rollout of Fibre is more about maintaining customer numbers. I believe that some of the players that rely on other providers for network, like Talk Talk and ZEN, will see thinner margins over time with possible consequences. As far as the VM/O2 merger, I just don't understand where the risk is for BT. The media make much of the combination, but it will take time to combine the businesses and they're talking about spending £10 billion on new infrastructure when they will already have £18 billion in debt at startup. In the meantime BT are rolling out FTTP at pace and there's no guarantee that the new VM/O2 company will be able to entice new customers, or increase retention of existing customers.
Where I do see growth for Telecom Network providers is in the area of IOT, which requires fixed and mobile network infrastructure to connect anything and everything. This may explain VM's interest in O2, as a mobile network is required to tap into this new growth industry. The two main players in the UK IOT world are likely to be BT and Vodafone, with Three and VM/O2 smaller players. You don't read much about it, but Vodafone own a national UK network through their acquisition of CWW and this will support any IOT expansion.
UncleBuck..... "I would prefer BT to be talking about growing revenue in real terms rather than just about standing still by cost cutting and dividend suspensions. I think that a more positive outlook would help the SP."
I honestly think growth will come once BT roll out fibre. Patience needed, Jansen says 5 years. BT will become a growth company withing this time period. Just my opinion of cause.
Don't want to be a troll but...how could anybody invest in BT?
Look at the 5 year graph. It's all downhill.
Maybe in the short term there is a profit but since 2016...very difficult to turn a failing business around.
Agree UncleBuck. You probably don’t need or want an immigrant’s opinion on the British civil service but you’re getting it, the civil service in this country is the worst. Nothing works and the ones I have dealt with hate the private sector. BT management isn’t the problem. It’s the government and unless you find a way to hold them over a barrel like the housebuilders have they will screw you to the detriment of your company and the users / public. E.g rail franchises.
I have not invested in BT to pay for everyone else's fibre. With regards to the dividend being re instated at 50% of what it was in 18 months, lets see what happens. Anyone who thinks that they can forecast the economic situation in 18 months is looking at tea leaves or a crystal ball. It seems that the fibre rollout programme is being funded by share holders and staff (cost savings later). It's all about saving money, but remember cost savings are like an overdraft, you can only use it once and you can only cut costs by so much before there is no fat left to trim. The government will get whatever fibre rollout across the country that they want, whilst paying as little for it as is possible. As for the value of the pension deficit, when revued this is only ever a snapshot in time. Remember that the pension scheme has the Crown guarantee which means the government has agreed to protect 80% of BT's pension liability if it were to go bust. I would prefer BT to be talking about growing revenue in real terms rather than just about standing still by cost cutting and dividend suspensions. I think that a more positive outlook would help the SP.
Toff.... "The BOD should always look after the best interests of shareholders but you have to question the integrity of the pigs that run BT. Putting your most valuable asset up for sale on the market stinks of asset striping. Investors used to moan about Paterson (former CEO) but at least he didn’t asset strip the company for monetary gain. I have serious doubts about this lot - they seem to be out to shade the employees and the shareholders for their own personal gain. If I was a big institutional investor I would pin the CEO up against a wall and ask him what his game was."
To be fair Toff, if indeed you're referring to Openreach, we don't exactly know that BT have put their main asset up for sale. I for one don't think that BT need to sell off any percent of Openreach. By cancelling the dividend for 18 months, then if it is reinstalled at half what BT was paying previously, plus the coast's savings going forward, this in my opinion goes a long way to paying for fiber.
‘Good positive move by the BT BOD giving up their bonuses, so they should,‘
My understanding of their announcement was that they were deferring their bonuses not forfeiting them. Shareholders have forfeited the dividend but it seems the vile pigs who run BT couldn’t bring themselves to miss out on their undeserved bonuses.
The BOD should always look after the best interests of shareholders but you have to question the integrity of the pigs that run BT. Putting your most valuable asset up for sale on the market stinks of asset striping. Investors used to moan about Paterson (former CEO) but at least he didn’t asset strip the company for monetary gain. I have serious doubts about this lot - they seem to be out to shade the employees and the shareholders for their own personal gain. If I was a big institutional investor I would pin the CEO up against a wall and ask him what his game was.
Good positive move by the BT BOD giving up their bonuses, so they should, I'm giving up over 6k a year in my BT dividends. What's good enough for the goose is good for the gander.
Do i detect a slight change in narrative.
BT shares now 'more reasonable' versus peers but risks remain, says Deutsche Bank
Besides general Market decline theres only the Pension Deficit holding this back from a slow steady rerate over the next few years. Am more concerned about the next 6 months and the possibilities of another crash but if we avoid that we are set fair from this current SP and DB will have to do a U-'turn and recommend a buy soon enough.
Surprised it's still only at 110 definitely a bargain for long term hold its going to be a slow burner with some dips
Great time to buy BY shares
Fleccy "Last thought, i can't imagine that retail are driving BT's price down and any recent retail purchasers will be battening down the hatches and riding out the storm, so it must be bigger players driving the prices declines."
I personally think the move has started recovery mode, but its slow in its move up inititially as there will be income funds, needing to sell some, due to cancelled dividend for next year and half and hence the price moves up slower, while these type funds sell. But the price action technically has changed bullish to me and as the income sellers get filled, the sp can then go up faster.