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This morning we shared our full year results for FY22, showing our progress towards a stronger, leaner and more modern BT.
Headlines
We’re on track, despite the tough market conditions.
While revenue was down, we’re growing EBITDA thanks to our modernisation programmes.
We’re delivering for our customers with improved NPS scores across the board.
We’re reinstating our dividend, as promised.
We’re continuing to invest for the future with our FTTP build which has now passed 7.2m premises, and our 5G coverage, now more than 50% of the UK population, streets ahead of our nearest competitor.
We’ve finalised the BT Sport joint venture with Warner Bros. Discovery, creating a really compelling combined sports offer for our customers.
We’ve also strengthened our strategic partnership with Sky, by extending our reciprocal channel supply deal into the next decade. And, following successful trials, Openreach and Sky have agreed to allow Sky engineers to complete the majority of home installations of full-fibre for their customers. These deals strengthen our strategic relationship with Sky and benefit all of our customers.
We’ve reconfirmed our FY23 outlook of revenue growth and at least £7.9 billion EBITDA.
Reflecting on our performance this year
As you will have seen, we did not return to revenue growth this year and every choice we now make is critical. Unfortunately, that means we’ve had to make the difficult decision not to award free BT Group shares, this year, through yourshare.
Looking to our future
With our simpler brand approach, targeted revenue growth plans and continued focus on costs, I’m confident we’re starting this year with the right plan.
Revenue £20.9bn, down 2%, reflecting revenue decline in Enterprise and Global offset by growth in Openreach, with Consumer flat for the year and returning to growth in Q4; adjusted1 revenue down 2%
Adjusted1 EBITDA £7.6bn, up 2%, with revenue decline more than offset by lower costs from our modernisation programmes, tight cost management, and lower indirect commissions
Reported profit before tax £2.0bn, up 9%, due to increased EBITDA offsetting higher finance expense
Reported profit after tax £1.3bn, down 13%, due to remeasurement of our deferred tax balance
Net cash inflow from operating activities £5.9bn; normalised free cash flow1 £1.4bn, down 5%, due to higher cash capital expenditure, offset by higher EBITDA and lower tax and lease payments
Capital expenditure £5.3bn, up 25%. Capital expenditure excluding spectrum £4.8bn, up 14% primarily due to continued higher spend on our fibre infrastructure and mobile networks
IAS 19 gross pensions deficit £1.1bn, (31 March 2021: £5.1bn) due to an increase in real discount rate, deficit contributions paid, changes to demographic assumptions and positive asset returns
FY22 final dividend declared at 5.39p per share, bringing the full year total, as promised, to 7.70p per share
Outlook for FY23: adjusted1 revenue to grow year on year; adjusted1 EBITDA of at least £7.9bn; capital expenditure excluding spectrum of around £4.8bn; normalised free cash flow of £1.3bn to £1.5bn.
Profit dropped, equity dropped, slipslide continues,
"Profit dropped, equity dropped, slipslide continues,"
Yet BT have just gone green, outperforming the market, as is Vodafone on the back of the Three announcement.
"IAS 19 gross pensions deficit £1.1bn, (31 March 2021: £5.1bn) due to an increase in real discount rate, deficit contributions paid, changes to demographic assumptions and positive asset returns"
Great news.
Be easily mid 90s on a blue day
"BT is set to more than double free cashflow before the end of the decade once it is past peak spending on ultrafast full-fibre broadband and 5G, and that could be boosted further considering BT has raised its cost-saving targets this morning. It has already delivered £1.5 billion in annual cost savings and is now eyeing £2.5 billion by the end of the 2025 financial year. Previously, it was eyeing £2 billion of savings by the end of the 2024 financial year.
It has now hooked-up 7.2 million homes to faster broadband and its 5G network covers over half of the UK population. The rollout is accelerating but BT Group has a long way to go before its converged network offering faster connectivity is fully unleashed across the UK.
The mammoth task of rolling out these services across the UK is not cheap. Normalised free cashflow was down 5% during the year at £1.4 billion as a result of a 25% jump in capital expenditure to £5.3 billion. However, analysts believe cashflow will start to improve in the current year considering the capex budget is set to fall to £4.8 billion."
https://www.cityindex.co.uk/market-analysis/where-next-for-the-bt-group-share-price-after-earnings-grow/
"Initial estimates indicate that around 200k tonnes of copper could be
recovered from our network through the 2030s. We are currently undertaking trials to better understand the costs associated with recovering this valuable asset. These benefits are structural upsides as the business changes, on top of the free cash flow arising from organic growth in revenue and the benefit of further transformation efficiencies, including the additional cost savings announced today, net of tax."
https://www.bt.com/bt-plc/assets/documents/investors/financial-reporting-and-news/quarterly-results/2021-22/q4/q4-fy22-release.pdf
According to Google, copper is over $9000 a ton, so 200,000 tones would have a value of at least $1.8 Billion at current market prices.
$9000/ton, is a bit high, current scrap price for copper wire is around $7500 - but still worth it.
However, there is also a cost in recovering it - possibly 50% ...
I’ll take 1.7p up at COP. Was better but given FTSE was well down today, that’ll do. Next milestone is June let’s see what will happen then, plus the market analysts and brokers need time to digest, all apart from Polo and chums.
Hey Larry a blue finish is never a bad thing matey I got it wrong by selling a few yesterday but overall happy with the results and happy to keep the reminder of my holding long term
3 tranches I bought this week, 173p 173.5p 175p.
2600 shares