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LONDON (Alliance News) - BT Group PLC held its dividend steady Thursday after the telecommunications firm reported annual profit widened modestly as one-off costs subsided, but underlying profit came in towards the lower end of analyst expectations as revenue declined.
For the year ended March, reported pretax profit widened 1.9% to GBP2.67 billion from GBP2.62 billion the year prior. This was despite revenue slipping1.2% to GBP23.43 billion from GBP23.72 billion the year prior.
Profit performance was primarily helped by a fall in one-off charges during the year to GBP564 million from GBP828 million the year prior. This was in particular due to the non-recurrence of warranty claims charges related to BT's acquisition of mobile operator EE, partially offset by a rise in restructuring costs.
On an adjusted basis - excluding exceptional items - pretax profit narrowed 6.1% to GBP3.23 billion from GBP3.44 billion the year prior.
According to company-compiled consensus figures for financial 2019, adjusted pretax profit was expected by analysts to decline to GBP3.31 billion. The actual print came in at the lower end of the GBP3.21 billion to USD3.46 billion range expected by the market.
"BT delivered solid results for the year, in line with our guidance, with adjusted profit growth in Consumer and Global Services offset by declines in Enterprise and Openreach," BT Chief Executive Officer Philip Jansen said.
BT proposed a 10.78 pence per share final dividend, unchanged on the year prior. For the full year, the dividend also remained unchanged at 15.40p. Jansen emphasised that the firm intends to hold the dividend at the same level for the new financial year too "given our outlook for earnings and cash flow".
"Since joining the company three months ago, it has become clear to me just how fundamental BT's role is in connecting our society," Jansen added, after having replaced Gavin Patterson at the end of January.
"While we are really well positioned in a very challenging and competitive UK market, we have a lot of work to do to ensure we remain successful and deliver long term sustainable value to our shareholders," Jansen continued. "We need to invest to improve our customer propositions and competitiveness. We need to invest to stay ahead in our fixed, mobile and core networks, and we need to invest to overhaul our business to ensure that we are using the latest systems and technology to improve our efficiency and become more agile."
"Our aim is to deliver the best converged network and be the leader in fixed ultrafast and mobile 5G networks," Jansen explained. "We are increasingly confident in the environment for investment in the UK. We have already announced the first 16 UK cities for 5G investment. Today we are announcing an increased target to pass 4 million premises with ultrafast fibre-to-the-premises technology by 2020/21, up from 3 million, and an ambition to pass 15 million premises by the mid-2020s, up from 10 million, if the conditions are right, especially the regulatory and policy enablers."
