RE: What9 May 2019 16:32
Bertram @ "Am I missing? Good returns in a tough environment, divi more than covered and now giving 7% return, just what am I missing? Even pension deficit being addressed. Getting near topping up time again and sod ofcom"
Yes, I think that is the most pertinent question posted today, that most of us must be asking ourselves, and briefly as won't have time for a full look into the figures just yet, but briefly may I offer 2 possible (possible = ie guesses) reasons why?
1) The guidance forecast to the market v the y/e actual results.
- The CEO reports that the revenue is "in line with our guidance" and that is that revenue would be slightly less than last year, so was expected to be so. Well IMO yes and no.
No, in that using the Trailing 12 month forecast whereby the half year results are computed into the projected full guidance year end results, means looking for revenue to come in at circa £23.570m which is still lower than the previous year's revenue.
And yes, insomuch as the actual results released today come in at almost that, but just below it, not just above it, as reported at £23.428m (the difference being neither here nor there, I agree).
Net Profit - was looking for £2,275m after tax. It came in at £2,150m after tax.
So not really significant, both are as the guidance promised in that revenue would be below last year and net profit would be the opposite - better than last year, up! So both delivered on that, but just a smidgen less than the half year hinted at what might be in store by the y/e.
So, I wonder if the market had similar expectations and it weighed on the next point I offer up.
2) Was the market looking for radical changes to BT from the lips of the new CEO? Were they looking to be impressed and inspired? (Personally I think it was a safe and "solid" interpretation of the results and his future vision/ intentions).
There's been some evidence in the media that the board is split. The new CEO (IMO) doesn't appear to have stamped his personal authority on BT. The chairman said publicly no cut to the divi and no selling off and mucking about with Openreach etc.
The new CEO (the media makes clear) wanted a divi cut, not sure what his views are on Openreach.
Whatever, it would appear he's "towing the line" rather than promising a new route to the future. Is that why the market has been a bit lacklustre in response as regards the SP today? They didn't want more of ol' Gav pants and maybe they think that's exactly what they're still getting except dressed in a new suit?
Was the market expecting some sort of impossible, but nonetheless radical vision, from a new CEO but he got hampered by a strong chairman and board who now have the bit between their teeth?
Other than that, the fundamentals are really, truly great looking - as ratio metrics - when compared to competitors. Facts are facts.
That's BT the business - but BT the share price is misbehaving - I think they need to be introduced to