BT Share News (BT.A)

(Sharecast News) - BT Group reported a 1% fall in reported revenue in its half-year results on Thursday, to £11.47bn, which it said mainly reflected the impact of regulation, declines in legacy products, and a strategic reduction in its low margin business.
The FTSE 100 telecoms giant said reported profit before tax was £1.33bn for the six months ended 30 September, which was broadly flat year-on-year, while adjusted EBITDA fell 3% to £3.92bn, which the board put down to lower revenues, increased spectrum fees, content costs and investment to improve competitive positioning, partly offset by cost savings from its transformation programmes.

Net cash inflow from operating activities was £2.17bn, with BT's normalised free cash flow falling 38% to £604m, which was blamed on increased capital expenditure, higher interest and tax payments, partially offset by one-off cash flows.

Capital expenditure for the period totalled £1.88bn, which was up £225m excluding BDUK grant funding deferral, and was said to have been driven by increased network investment.

BT's net debt increased primarily due to the implementation of IFRS 16, at £6.1bn, and net business cash outflows, of £1.2bn.

The board declared an interim dividend of 4.62p per share, which was 30% of last year's full-year dividend of 15.4p per share, and maintained its overall financial outlook.

On the strategic front, the company said it launched a "host of new products" for consumer and business segments, including the new 'Halo' converged product plans, and BT Mobile 5G.

It also introduced a range of new service initiatives during the period, including bringing the BT brand to the high street in more than 600 EE/BT dual-branded stores, and to answer 100% of customer calls in the UK and Ireland from January 2020.

The company said it continued to make progress on the BT modernisation agenda during the half-year, including delivering more than £1.1bn of transformation benefits, announcing the first locations in its 'Better Workplace Programme', and the disposal of BT Fleet Solutions.

It outlined its 'Skills for Tomorrow' programme to provide digital skills training for 10 million UK children, families and businesses during the half as well.

Looking at its operations, BT said its 5G network was live in more than 20 cities and large towns, with 5G smartphone plans now available on both the EE and BT brands.

Its Openreach subsidiary announced the launch of new fibre-to-the-premises (FTTP) 1Gbps and 550Mbps products, with its FTTP rollout at around 23,000 premises passed per week.

To date, 4.2 million premises had been passed by FTTP and G.fast technology to date, with the company's current plans to build FTTP in 103 locations.

Consumer fixed average revenue per customer (ARPC) was £38.5, which was "broadly flat" year-on-year, with postpaid mobile ARPC standing at £20.8, which was down 5.5% year-on-year due to the impact of regulation and the continued trend towards SIM-only.

Revenue generating units per address was up, however, to 2.38.

Postpaid mobile churn remained low at 1.2% in the second quarter, despite the impact of the new auto switching environment, with fixed churn at 1.3% in the second quarter, down from 1.6% in the prior year.

"BT delivered results in line with our expectations for the second quarter and first half of the year, and we remain on track to meet our outlook for the full year," said chief executive officer Philip Jansen.

"We've invested to strengthen our competitive position.

"We've accelerated our 5G and FTTP rollouts, introduced an enhanced range of product and service initiatives for both consumer and business segments, and announced price and technology commitments to deliver fair, predictable and competitive pricing for customers."

Jansen noted that Openreach was "significantly accelerating" its pace of FTTP build, and was now passing a home or business every 26 seconds.

"Openreach announced a further 29 locations in its build plan to reach 4m premises by March 2021, and we continue to make positive progress with Government and Ofcom on the enablers to stimulate further investment in full fibre.

"We continue to make progress on the BT modernisation agenda, delivering over £1.1bn in annualised cost savings, and announcing locations in our Better Workplace Programme."

As at 1002 GMT, shares in BT Group were up 0.57% at 203.1p.