Member Info for Velo

Thanks for the head's-up Garjon. I too, became curious if the Q1 forecast was out today with such a dramatic singular increase today on top of a relentless SP momentum all this week. And so it is. (Checked a couple of times on similar suspisions as others below, but I was too early, then got tied up elsewhere.

- Will write up a post shortly this evening. Only just glanced minutes ago but prefer to input the new data into my running spreadsheet for comparison purposes but off the top of my head the revenue has done what I thought it might do, and shown 3 straight forward years of increases after increases. :)

Been a long time waiting for that but gotta say it - in revenue terms the next 3 years suggest the revenue floor is in and now it's a case of potential revenue growth - or at least the analysts believe that, as far as up to 2023/2024. Up, up, up!

So I can understand some 'leakage' today (resultant in SP performance today?) in that the revenue forecasts are reformative, compared to the revenue momentum all the way back to 2016 and thus pure sentiment changing, and most significant!

However, that's off the top of me 'ead, because I'm taken aback that the analysts forecast have transferred the old revenue disease to net profit. I was seriously expecting continued growth in net profit but they have it "doing a revenue job" in that a nice increase showing for this year greater than the full year just achieved, then an even more fantastic increase in year 2, ie., next year - then they are showing the wheels coming off net profit in year 3 - they have year 3 dropping LESS than year 2!

What?! - Tellin' ya!

Was looking for the full MONTY on this initial Q1 but now they have profit limping in year 3!

Whatever, doesn't seem to have upset the SP. Regard all the foregoing as just first speedy glance until I sort it out properly in my spreadsheet.

What do you make of a falling net profit in year 3 (2023/2024)? I mean - the forecast update was released during market hours yet the SP remains in stellar performance by close, unaffected.

PS. Analysts have kept their traps shut in the pension deficit column LOL! Just a dash - all the way along. They should have said "fecked if any of us know" LOL!

Back later this evening.

Thanks for your response Luna. A fascinating post by you. Appreciated.

Will re-read again, and return to it a couple of times, in due course. I do enjoy the real life experiences of others as opposed to text book guideline 'rules'.

I agree with you and Sirius; that no one way is the holy grail, and most investing strategies have their day in the sun, coming into their own as sentiment ebbs and flows within the stock markets. So using what one is most comfortable with, is important.

Most of the investing books I own are promoting differing theorems on what has worked for those guru authors. But several of them seem to agree that whatever, at the end of the day, you must align to what fits your own risk profile - your own investing character leanings, and outlook on life.

As much as I read alternative investing strategies I'm more and more wedded to trend following with each passing year, than when I alight on a particular appealing strategy.

Having held 20-25+ stock portfolios in the past - is where my "errors" mostly lie buried but was mostly following divi income strategies back then.
(Coincidence or too many stocks to keep my eye on the ball?)

" 3)
Potential for a further push this weekend, should the first Q1 trading update of this new trading year be published this Friday/Saturday. "

------------

- To be clearer - that's Q1 consensus forecasts due, not a company Q1 trading update.

LunaNera @
" I don't diversify. I never did.... for decades. There are better ways of managing risk. I only ever have a handful of positions. It takes me years to find one to invest in though. . . "

-----------------

- Would be intrigued to hear a fuller exposition of your adventures Luna (but of course not your personal finance details for security reasons) on your personal strategy, Luna.

Reminds me very much of Warren Buffet's advice given at a conference call on a YouTube video somewhere, when he answers an investor's question by advising that you only ever get 2 or 3 at most, really great investing ideas in an investor's stock-picking life, so why dilute those by adding lesser stocks, thus diversifying your available funds?

- Which is not what the average investor would think Buffet would advise investors to do.

However, the inexperienced, general investor, and those with attention required on demanding full-time employment etc., are better off diversifying if they can't devote full time to investing.

But your strategy, identical to Buffett's advice - fits the school of thought mantra that runs: Diversification = Diworsification.

And also matches a superb little investment book I obtained for free some years ago called: " Zurich Axioms "

A smashing read with lots of real-life examples. A book that was generally hated by media reviewers - not for its quality - but for the strategy it espouses in the little entertaining book. I doubt many have heard of it - as it runs against general investing lore. Amongst my collection of investing books, that one has a special place within it.

Yours is not a strategy for the inexperienced, risk averse, or safety-fist investor IMO - but Buffett argues the exact opposite :)

1)
Superb current intra-month SP performance for a known under-performing month (May).
All it has to do is close this month, above the first day of this month's trading day - an achievement in itself - to be out-performing the historic (bearish) average for 1st day of May (which was 167.95 close on May 4th)
- not to mention showing a continuing decent response to the annual trading results; that's a first since 2016 in itself!

2)
Early days but now, but significant nonetheless - the SP has officially just exceeded the longest ever prior breakout bull run since the 2016 decline commenced.
All other varied-lengths, but failed breakouts, have now been dwarfed by this current breakout which commenced in early November last year. Nothing any holders in BT since January 2016 have experienced prior to this breakout, matches what is being experienced currently! The prior 6 month record breakout, now exceeded, is now being left behind as this uptrend moves beyond that 6 months duration, into new ground.

3)
Potential for a further push this weekend, should the first Q1 trading update of this new trading year be published this Friday/Saturday.
And if not this weekend, then likely the weekend after that; as not expecting anything untoward to emerge from it, far from it - on the contrary!

PS.
Currently I personally have fair value as at v high 300's - a few single pence short of £4.

Simply Wall Street is currently forecasting not far behind at 369p tonight.
(Fair value is not the same as market sentiment valuation).

Brokers current 'price target' is showing as 183p.

'Forward' P/E ratio based on old forecast guidance is showing as P/E 8.43

Thanks for that heads-up Bkkbkk.

Had to double check - it came out at 4pm - about 30 minutes after I posted and mused aloud as to whether other insiders might follow suit if they are all of a similar mind.

Was going to nash my teeth if it came out before my post LOL!

Too far back for me to find it, but tried looking up a post I did not too long ago listing up all the BOD's shareholdings in an attempt to find the canniest director in buying in at the lowest SP (turns out it was Jan du plessis).

However, what became overwhelmingly clear was that all the BOD had bought in at decent lows when sentiment was on the floor.

So they have earned top ratings in stockpicking and buying well at lows before further rises.

All of them had bought before the lift off from £1 to the early Nov bull run commencement.

- 2 of them held nil shares but one was an employee of DT the other the boss of Openreach. Regardless the entire board are proven 'gifted 'at buying-in at seriously decent lows when the whole market had a case of the dire straits of diarrhea over the SP of BT.

Below: Thanks for the positive feedback.

What made me raise an eyebrow was that Jansen bought only 24 hours after the results were published. I think "insiders" are prevented from buying or selling 90 days before a major trading update. I also thought it lasted for a period after the publication of those trading updates. Clearly it must be only up to publication day.

Buying that fast means the decision was already in his mind well before the results were published. I'd expect other insiders to follow suit soon if they are all of a similar mind.

This quote from a US site (so dismiss the 6 month rule for the UK's 90 day rule) -

"One of the greatest investors of all time, Peter Lynch, was noted as saying that "insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise."

Insiders are prevented from buying and selling their company stock within a six-month period; therefore, insiders buy stock when they feel the company will perform well over the long-term."

Sidebar:
The final para in Alylbally's link below -
"In the 12 months to the end of March 2021 profit dipped 23% and revenue fell 7%, BT said on Thursday"

That's a nice example of what I was referencing in my posts further below.
- You might think what a terrible result. But by only referencing "dipped" you realise they are signalling they are comparing the results to last year only.

Net profit was a little dissaponting yes, but not as deeply dissaponting as when compared to last year only, and as trading results have generally dissapointed for several years it's nothing new.

Revenue "fell" 7% is also clearly referring to last year as most know the one thing that has fallen every year non-stop has been revenue.

However, revenue results are right up there with the better performing metrics against market expectations on coming in at almost on target to the consensus analysts average forecast and is widely considered as meeting expectations.

A nice example to stop and think, asking oneself, is the news item referring to last year or more importantly for sentiment - to market guidance expectations?
There's a world of difference it makes to the momentum of the SP. One sounds terrible. Meet the guidance expectations and the market is reassured things are under control - especially as the next update is likely to show the absolute floor for revenue occurs in this current year, and then that's it! Afterwhich it starts increasing once again.

Net profit hit the floor in these results announced last week - and now starts rising from this current year, indefinitely into the future.
All that is overlooked when comparing blindly to last year only. The first Q1 to confirm that in the next week or two should have an added positive effect upon sentiment. Watch out for reviews doing a switcheroo on viewpoints when reading them. Determine first which standpoint are they looking at results from.

Error! >

"May...... is THE single worst performing BT month in almost every year in that period!"

------------------

Apologies, correction required!

Although it's close, I should have more correctly said that in SP terms, May is the worst performing of the remaining months of this calendar year
- as it is in fact - January, that is the worst performing month of them all, in BT's history, even when extended even further back beyond 10 years!

January is historically, the worst of all months for BT, for SP under performance.

Final post -
Deconstructing the poor Q4 & Jansen's statements from both years at Q3 cumlative summaries
===========================

It was the fourth quarter that pulled the progress of earnings below the consensus average, if events go on to prove that market sentiment favours dead on accuracy of the consensus average above all else, despite balance sheet metrics performing within the two extremes of the analysts forecasts. And also impacted Jansen's forecasting statements for the past 2 years.

The prior year's final (19/20) result can only be described as shocking in that the Q4 final, destroyed the decent progress made up to the cumlative Q3 period, and with it Jansen's Q3 statement that all would be brought back into line with full guidance by the year end. And then he went and got himself self-isolated with positive Covid tests.

But even the consensus forecast was unprepared with the lowly result for the full year, hence the 'shocking' epitaph, destroying Jansen's promise of a return to full guidance by the year end as an empty promise, and the SP's subsequent descent to £1.

Again, in Q3 this year Jansen stated he was very confident the market would see improved positive returns in earnings by the year end.
- And the same thing happened again.

Instead of the prior £425m average per quarter net profit earnings achieved
- instead this Q4 final only produced less than half the average at barely  £200m return! And that's why even the analysts lowly earnings consensus earnings forecast was too much to achieve, and left me stunned.

It came in lower than the consensus average (but still inside the forecast extremes) and in doing so made nonsense of Jansen's well meant platitudes at Q3 promising improved earnings progress.

There was no progress in net profit because once again Q4 is taking on a life if its own literally coming in at almost half the previous 3 quarters period averages at only barely  £200m!!!

Two conclusions:

1)
Does 2 years of under performing Q4 earnings herald a period of BT becoming viewed as a 'cyclical' company?

In that, the great cumlative work at the Q3 period is undermined in the final Q4 period (two years running now) or is it all transitory, and all down to Covid lockdowns only?

2)
It reveals that for all the commendable changes introduced by Jansen, he tends towards soothing platitudes in his forecasts seeking to please, rather than reveal unpleasantness - because if not that, then I view him as having a weakness when it comes to guidance forecasting, despite all his many strengths.

I now take more notice of the analysts future guidance than Jansen's forecasts. It should be the other way round!

PS. If that sounds bearish - bear (pun?) in mind I'm invested in BT and seeking to top-up on any misguided market sentiment opportunities.

The end :)

SP momentum review concludes > > >
===================

. . . Pleasingly, the SP is now no longer in overbought condition.

So unless there's a deeper malaise, I expect the SP to recover it's momentum, once the results sink in to the wider market.

Just the remainder of May to deal with.

Now is the time to see if this new-from-last-November predominant bull trend changes the old school downbeat SP reaction to the results, as no historic big % months lie ahead until the autumn - so if that assertion gets broken before late autumn,  then that would be seriously something new too, aided and abetted no doubt, should  the first new year Q1 forecast (due in the next week or two) provide a change to all previous 3 year forward analyst consensus forecasts from:
down, down,  down, 
to
. . . up, up, up, which I think is more than a strong possibility!

PS.
All significant and predominant longer term trends are strongly bullish. Admittedly the flibberty-gibert Ultra Short Term trend turned bearish after last week but it is just that
- ultra short term, in outlook.

The trends that matter are still all uptrending raging bulls!

Good enough for me! Your opinion may differ:)

==========

Final post next on deconstructing Q4 and Jansen's RNS statements

SP momentum review:
==================

A week or so before the results I lightly posted of 2 potential 'bull traps', so the catalyst of results day bringing them to the fore is not really that surprising
- or wouldn't have been, had I made a meal of those posts.

But as said, I posted them lightly as didn't want to make an issue out of them as  both are based on probabilities only, and were not stake-your-life certainties. I believe they have had more prominence than international events.

Had there been no results due, I would have pressed harder on the two bear points as they were 'bound to' have an effect, regardless of the results
- unless results surprised hugely to the upside.

The first was the monthly 'seasonal' historic price action over the years, and that is, for the past 5/6 years, May has overwhelmingly closed consistently lower than it opened and coincidentally based on probabilities, is THE single worst performing BT month in almost every year in that period!

(Including the May of the previous record breakout in 2018! (that 6 month bull run now beaten by this current bull run that commenced from last November).

The corollary of that, is that late autumn (Oct/Nov/Dec) are, on historic performances, the best performing months of the year for BT!

However, the first trading day of this month of May closed at 167.95p suggesting this month will have difficulty closing above that price, based on probabilities.

Secondly, I did follow up on later from that post with another post of the SP entering overbought condition (and coming out of overbought can sting a bit, when a stock is in a predominant down trend).

BT has ceased being in a longer term predominant down trend, so I don't expect things to get massively worse.

AND those two downers were in plain sight, before the results were known, just waiting for a catalyst to enable them.

I don't think the actual results warrant that much reduction; it's more old school reaction than the results per se.

That buoyant SP increase leading up to the results, propelled the SP into overbought condition; perhaps some were thinking analysts forecasts would be smashed rather than just met, by buying in before results?

Pleasingly, the SP is now no longer in overbought condition.

So unless there's a deeper malaise, I expect the SP to recover it's momentum, once the results sink in to the wider market.

Just the remainder of May to deal with.

Now is the time to see if this new-from-last-November predominant bull trend changes the old

Thus post concludes on next page > > >

Actual Annual Results v analysts guidance concludes > > >
=========================================

Pension Deficit forecast:
Consensus Average = . . . £9.75bn
Minimum = £7.5bn > - > Maximum = £11.3bn

 
BT posted results of: £7.98bn

RESULT = BINGO!!!
BT fully met consensus target guidance for Pension Deficit by coming in at the lower end of the deficit forecast range
- a smidgen closer and it was on course to "beat" the entire analysts forecast range.
No miss there. Fact! :)

 ============

(Reported) Net Debt forecast:
Consensus Average = £17.906bn
Minimum = £17.011bn > - > Maximum = £19.315bn

 BT posted results of: £17.82bn

RESULT = BINGO!
BT's actual Net Debt fully met consensus forecast.
No miss there. Fact! :)

 ============

Summary:
None of the major metrics under fundamental headings missed the analysts expected forecast range.
All performed within the "fuller" range of analysts expectations.

Market expectations met. Fact. :)

Maybe the negativity is some reviewers demanding accuracy to the letter in achieving "average" consensus rather than compared to the full range forecasts as some already focusing on the pension deficit bettered the consensus "average" by £2bn.

Negatives?
Net Profit was a little, slightly below, 'consensus average'.
I was expecting it to exceed the average, to sit at the upper end of the analysts forecast range.
Not a biggie though, as still inside, within the entire forecast range - as all headings were.

All in all? All analysts forecast headings met. No disasters.

===========

Now from the above, the SP next - in a separate post.

Actual Annual Results v analysts guidance
==================================

I will be posting 3 opinions. Intially a comparison of actuals v market guidance

Secondly a post on the SP momentum,

And finally a brief deconstruction of Q4.
--------

Whatever, I can find no evidence of BT's results being below consensus full forecasts. It goes without saying that yes, the vast majority of the balance sheet metrics are (and were expected) to be down on  'last year'.
LAST YEAR - not down against analysts forecasts.

So it's the comparison of BT's results to the consensus forecasts that are important.

PS. If you see reviews of failure to meet consensus forecasts please copy/paste them here; I'm betting they'll be comparisons to either reduction % against last year or simply irritations of near-to failures to achieve the consensus "average" rather than being on the plus/top-side of the consensus average - not failures to meet analysts fuller forecasts.
It makes all the difference to forming your own view.

So, from the top.....

-------------

(Reported) Revenue forecast:
Consensus Average = £21.370bn
Minimum = £21.252bn > - > Maximum = £21.540bn

BT posted results of: £21.331bn

RESULT = BINGO!!!
BT fully on consensus average target guidance for Revenue.
No miss there. Fact! :)

============

(Reported) Pre-Tax Profit forecast:
Consensus Average = £1.868bn
Minimum = £15.26bn > - > Maximum = £2.039bn

BT posted results of: £1.804bn

Result = Acceptably within entire consensus range for Pre-Tax Profit.
No miss here. Fact! :)

 ============

(Net) Profit forecast:
Consensus Average = £1.521bn
Minimum = £1.236bn > - > Maximum = £1.651bn

BT posted results of: £1.472bn

Result = Acceptably within entire consensus range for Net Profit, but a little dissapointing in that, it confirmed Q4 underperformed again, as it also did last year.
Not a miss, but an acceptable within-analysts-range achievement.

 ============

This post concludes in next page > > >

"... each article seems to state different reasons why the share price dropped... possible a combination of many things but the ones mentioned are:... missing analysts targets... etc., etc.,"
--------------

Hoping to post a fuller deconstruction of achieved v main full year forecast metrics for sometime Sunday,
- and then a summary " opinion" of initial mkt reaction to current sentiment/ outlook.

PS. Net debt in line with guidance :)

All I got time for today.

Revenue about spot on to guidance.

Pre tax profit and net profit under guidance but maybe mkt will agree with Jansen as in line as only small misses (personally dissapointed with £1.4bn net profit, but guidance was for £1.5bn).

Pension deficit in at lower end of guidance so is that the reason for promise of £900m per annum in pension contributions now reduced to only £600m from 2024 onwards - or because cash needed elsewhere?

Net Profit minimum and maximum should be swap places with each other too. £Amounts are correct.

Minimum = £1.236bn > - > Maximum =£1.651bn

CORRECTED!
=================

(Reported) Revenue:
Consensus Average = £21.370bn
Minimum = £21.252bn > - > Maximum = £21.540bn
----------------

('Adjusted') Pre-Tax Profit:
Consensus Average = £2.295bn
Minimum = £2.110bn > - > Maximum = £2.431bn
----------------

(Net) Profit:
Consensus Average = .£1.521bn
Minimum = £1.651bn > - > Maximum = £1.236bn
----------------

Pension Deficit:
Consensus Average = . . . £9.75bn
Minimum = £7.5bn > - > Maximum = £11.3bn
----------------

(Reported) Net Debt:
Consensus Average = £17.906bn
Minimum = £17.011bn > - > Maximum = £19.315bn
----------------
'