Member Info for Velo

Was expecting BT’s normal analysts’ consensus estimates either Friday or tomorrow. Didn’t check on Friday, so just had a quick peek on BT’s site - and there it was – dated Friday – so they did deliver on the 1st Nov after all!

Not much change from the 18th update. Q2 consensus for Revenue is looking for £5.2b+ (slightly up on the Q1 actual of approx, £5b)

So, for the full H1 Revenue, they’re looking for £10.2b+ in total come Thursday.

Both BT’s, H1 & H2 Revenues for the year are usually balanced, however that latest update confirms a slight uptick for their expectations for H2 (as their consensus (if £10.2b achieved on Thursday) would put Revenue on course for the full year estimate in the region of £20.7/£20.8b

Net Profit is harder to come by for Q1, and their consensus estimate for Q2 Net profit is blanked out (as per usual).

However, the full year Net Profit consensus is showing as £1.37b/£1.38b so for H1 roughly, expectations of £680m+ (last year’s full year Net Profit was the lowest ever recorded @ only £855m) so H1 should be within arm’s reach of approaching near last year’s full Net Profit.

For Thursday I’d be looking for: 1) No less than £10.2b for H1 revenue and 2) maybe £800/£900m for H1 Net Profit.

However, on the day the big question is – Is it too early for the market to see any of the reduced CAPEX spending, show through to ease the cashflow burden?

I’m not sure personally about the bottom line, however, the above is what the market via the latest consensus will be looking for.

Some really great looking balance sheet metrics currently appertaining to BT but at the same time Liquidity is shot through quite badly. So, it’s the cash flow statements that the market will be more interested in, and investors need to see some small progress on that front.

If not, then further market calming may be required to reassure the market it’s not jam tomorrow promises, but in that case further guidance to the previous timeline regarding cashflow/liquidity issues may be called for.

I have no reason to doubt the current years-away timeline for improved cashflow, but like kids on a long car journey and the ‘are we there yet’ lament, the market will be asking for similar reassurances on the cash flow issues.

well congratulations to savage, for continuing rodders work of turning this forum into a rubbish dump for delivering posts devoid of any direct opinions/analysis of bt itself. why not post your ad nauseam political views on the guardian site instead - and use this site only for your direct bt content?

sorry to interrupt the rubbish politics-lovers, but this post is addressed to the minority of readers with a passing interest in bt.

well, it’s nov 1st on friday - and november means it’s h1 trading update time! yay :)

however, before then it’s budget day tomorrow so a legitimate event for ****amamie rabid political views to continue unabated - i accept that continuance for wednesday. but it won’t stop there before the t/update, because next tuesday is us election day - and both tomorrow and next tuesday could affect investor sentiment towards stocks. so i yield to the crap posters on those two events.

after that it’s all eyes on next thursday’s november 7th h1 trading update, and i hope, a chance for the bt forum to be rescued from the pointless rabble.

i might not be available for the 7th but maybe soon after, so have some astonishing market guidance figures for bt i wish to reveal, which i think are too good to be true. checked the bt site and the analysts consensus mean/median averages are way below the data i’m looking at, but did see that the highest estimates on there matched what i’m looking at. but am still dissatisfied.

pretty sure there will be another analysts consensus update on friday nov 1st or the following monday. so still a chance for their current figures to rise more to in-line with what i’ve obtained. it’s important because the old ‘below market guidance’ chant will be bearish towards the sp whereas beating market guidance will obviously spur the opposite. will post what i’m looking at for bt to achieve closer to nov 7th, if there is yet to be, another consensus update before the important h1 update.

any non-political posters with a view on what market guidance bt will have to achieve to satisfy the market will be most welcome from anyone who holds such data, as it’s unclear whether the ceo is hinting at earlier than the next 2 years visible rewards of post capex spending at this h1 juncture, or q3/q4 or maybe from next summer of the 25/26 trading year.

Https://www.theguardian.com/business/nils-pratley-on-finance/article/2024/aug/12/farewell-patrick-drahi-from-bt-who-wont-be-missed

So much for Drahi intimating his intentions by earlier this year encouraging reports of his holding as: "it's ring-fenced".

Judge a person not by what they say - but by what they do. The same consideration is applicable to Bharti's soothing words. If he was that interested in being an investor only, why not a smallish holding already, say similar to Slim?

No decision made as I remain ambivalent towards statement from the new guy.

Bt

BT has reported revenue slightly down (2%) against L/Y's Q1 @£5.1b

But that's bang on what the analysts were forecasting too! So for Revenue it's target acquired, target achieved!

BT has delivered market guidance for Revenue!

No profit forecasts available so can't comment further.

BT.

Drahi's view in DMail in April of this year:

Debt-ridden Patrick Drahi won't hang up on BT https://www.thisismoney.co.uk/money/markets/article-13304289/Debt-ridden-Patrick-Drahi-wont-hang-BT.html?ito=native_share_article-top

"... More urgently, he is facing a stand-off with the creditors of Altice, his telecoms and media company, which is struggling under a crippling debt mountain of around £48billion.

Selling assets could be a way to raise funds quickly. This is already underway, with Altice France's media arm disposed of for £1.3billion in March. But there is one investment that Drahi, 60, has steadfastly ringfenced despite it losing him money, and that is BT.

The Mail on Sunday understands that a sale of his 25 per cent stake in the British telecoms group is not on the cards...."

- - -

The FT article is speculating on what Drahi "could do" due to the pressure being applied to him by creditors.

So it's more an opinion/examination of his options, than a decision by Drahi. It's well known old-news not a new development.

Since the other, above DM April article, with BT's SP rise since then, Drahi's BT holding is no longer a loss holding position in BT.

So that puts paid to the FT statement of the danger due to:

"if the underlying shares fall in value".

However the DM April article is pretty definitive on Drahi's outlook concerning his BT holding describing it as - "Ringfenced."

=======

More imminent than speculative media reports, is BT's Q1 trading update to be published next Thursday.

Trying to put some market expectations (cash flows) together but for Q1 (Cash flow) it's all blanked out on the analysts forecasts on the BT site for Q1.

So all I've got is circa £5.1b+ expectation for Q1 revenue.

Two media reports in recent weeks have issued statements that the benefit from improved free cash flow will not be as good as the market expects for Q1 alone, but both said they stand by the improved full year free cash flow being achieved.

So a bit wishy-washy for Q1 as can't see any cash flow forecasts for the first period, except for the future full trading years.

Anyway it's the H1 in November that I will be much more interested in than the initial Q1 next week.

Yep, looks like they've been selling bonus shares gifted to them.

Maybe the bonus scheme matured on the same day?

Mentions of, to pay tax bills on some.

It's a mixture of buys and sells by them. Some of them have had bonus shares gifted to them.

- Think there's 6 of them involved.

"Sneaky sell off by a director. .. "

- - - - - -

Not any old director

- but my mate the Chief Financial Officer whom I just spoke to on Friday - Simon Lowth!

That was transacted just yesterday, on Monday, Feckin' strange that, the first available trading day after I phoned and emailed them.

Followed by a slew of other BT lesser types boss of regulatory stuff etc., must be half a dozen of them. That email I sent was supposed to be confidential.

I did say to Fleccy should I email my findings and not broadcast them on the forum publicly,

- so blame Fleccy - not me!

How did the lower types get on it? Smells a bit like the Tory backroom boys placing bets on the election date now running and hiding from the cameras.

Typo 2nd para from bottom -

" If free cash flow was unsatisfactory as my own liquidity metrics suggest, then the substantial increase may well be surplus to requirements"

Opposites, should have read:

'If free cash flow was unsatisfactory as my own liquidity metrics suggest, then the substantial increase would most certainly be needed'.

Hi Fleccy,

“ Velo you say:

"Proof needed? - the CEO expanded early last year on needing 5 years to solve this issue. She again referenced cash flow issues on her mind, just recently at the full year results. She intends getting to grips with it"

Can you link to the statement where she presents it as a problem? Because I interpret what she said differently. In the results she actually said: . . . . . ”

- - - - - - - - - -

I think we’re getting into semantics here. She did not mention the word ‘problem’ - I did in a totally older post but here said: 'needing 5 years to solve this issue'. But pretty sure I might have used problem as a word in older posts, as a shorthand catch-all to her working intent, because that’s what my data implied. (Just had a reply from my data provider confirming generally updated daily, but some metrics can only be updated on each trading update).

Think we’re into semantics and: This glass is half full, to; No it isn’t - it’s half empty, territory.

ie., Semantics - A family is driving from the south all the way to Scotland. The driver says, he needs to fill the fuel tank substantially for such a long trip.

Would you expect him to pay, say £15 for a small top-up or pay £50/£60 to fill the tank up? It depends on his inference doesn’t it?

Top up? Just a small amount, but substantially? That would mean intentions to near fill the tank, yes?

In a May 16th statement A.Kirkby said:

"We have now passed peak capex (capital expenditure)," she said on Thursday. "This, together with ongoing operating efficiencies, means we expect normalised free cash flow to increase SUBSTANTIALLY from this point on.”

If cash flow is about to be increased ‘substantially’ (her word) then she’s implying that the fuel tank of the free cash flow position before the substantial increase arrives, is not really sufficient, otherwise if it was not a problem, then a small top-up would suffice.

Hence I said words to the effect that she was demonstrating she had grasped the problem. Jansen’s statements did not use the word ‘substantially’ ?

So I inferred that she is trying to reassure the market that a considerable change to free cash flow is coming. If free cash flow was unsatisfactory as my own liquidity metrics suggest, then the substantial increase may well be surplus to requirements. However her whole demeanor/delivery is that this ‘substantial’ increase over the next 5 years is very much needed indeed ie., ‘from this point on’.

Otherwise why introduce it’ll take 5 years, if no one is waiting with tongues hanging out? That was my inference from the single word “substantial”. I won’t know right from wrong until the late July/Q1 update is out.

Hi Merciaman,

Trying to post an additional final post (to my final post yesterday:) to another poster naming me for a response - when I saw your post this morning and instead have managed to divert my time to your post and left that other poster ‘new final post’, until another time :) :)

I deleted my original opening para of my response to you yesterday (to cut down on post length) in which I opined that your initial post indicated to me that you might have more personal experience of Negative Working Capital than I possessed myself.

So I’m very pleased you’ve confirmed that assumption of mine today.

Pfft! They should drop the “Womens” prefix from Women’s intuition tag-line because men have it too. LOL!

Your sentence to me on:

“…Your point about the other metrics flashing red is a fair one…”

I was already grappling with that beforehand and have already fired off a query to the helpline of my data service provider querying the validity and requesting their updating periods of their liquidity metrics.

Overall I’m seeing BT awarded v high investing summaries with the remaining data and BT now carries a rating of Super-stock!

So - as it's from the same source - how can that be?

- With their own liquidity data drowning below recommended safety levels, deep in the red? Cash flow is more important than profit!

Most successful guru type investors have achieved their wealth through discipling themselves to preplanned investing criteria, hence PE ratios must be in lower single figures for value hunters etc., decisions of that kind of thing.

One of mine is visible decent liquidity and little/modest Net debt. So all in all, I’m suffering from failing to press the BT buy button. That’s my position at the moment. Was planning to buy in the autumn anyway, but that was before this explosive rally from the day of Boudica’s speech to the troops

- akin to Elizabeth 1st rallying war cry to her troops that became a defining moment in British history, aka -

“‘I may have the mind and body of feeble woman but I have the heart and stomach of a king!”

“I love squeezing shorts”

- is up there with the best because Allison Kirkby changed the entire river course of UK market sentiment towards BT - in one single day!

Now that was some rallying war cry.

So, my question to you is, do you carry any doubts about the lack of visible positiveness in the liquidity metrics of BT that you personally use? Because it’s not yet matching what’s coming out the mouths of BT management and recently the CEO said again, some of it was already coming through (have to wait until late July minimum to see if a tiny movement shows up in the Q1) trading update.

Is that all it is? - My data is lagging events until it gets updated on July 25th?

(Concludes part 2 of 2) >>>

. . . Another situation where your suggestion might work in BT is when Negative Capital is actually not working as you suggest but instead is very damaging.

However, as long as all other liquidity metrics are in their safe zone, then maybe Negative Working Capital on it’s own, could be ignored safely, somewhat longer without issue.

However, every single liquidity metric in BT is under water flashing red warnings.

Cash on hand is at an all time low.

Net leverage is raised to dangerous levels.

Net Debt can’t really cope with a lot more debt added to it.

All together with all price to cash flow metrics signaling they can’t breathe - does not suggest this is an okay time to let Negative Capital continue increasing (last year breaking through into the billions) and now into its 4th year!

Proof needed? - the CEO expanded early last year on needing 5 years to solve this issue. She again referenced cash flow issues on her mind, just recently at the full year results. She intends getting to grips with it. Maybe some think she was just filling in time to sound good by discussing liquidity issues, and should just ignore cash flow issues?

Where in all that landscape is letting Negative Capital run on unhindered now into its fourth year - and increasing with every single year to billions this year, helping?

Merciaman @

“ Velo, interested as to why you think working capital (or rather current assets less current liabilities) of negative £1 billion is an issue ?

This "deficit" is driven by receivables being £2.7bn lower than payables - ie they are effectively using their suppliers to help finance the ongoing business. That is good business practice. “

= = = = = = = = =

First off - there is no Working Capital in BT - Fact.

What’s left is Negative Working Capital!

I seem to be repeating myself on this issue. So I’m making this my last response to this particular metric as it has been addressed to death in previous posts.

What you say applies to only a certain type of business. And to my knowledge Telecommunication industry companies are not one of them.

Certain retailers and those companies who rely on regular purchasing of stock supplies to sell on to their customers, at all times - are.

And in those examples you’d be correct in your assumption. As a best example - greengrocers are top of the list to run with Negative Capital on a regular basis almost permanently without distress.

It only benefits when say the aforementioned greengrocer buys fresh produce weekly from a wholesaler, just enough to last a week due to perishability and available storage space in his walk-in cold room.

During the week, he sells virtually his entire stock because that’s what he wants for perishability concerns. He wants it gone in a week. At the end of the week, all his sales are enough to buy the same amount without costing him a penny more than the cash he has from his customers and fully restocks his greengrocery for another full week. Apart from fuel in his van, he has all the cash he needs to buy more stock as he’s only buying one weeks worth. In that type of liability situation your suggestion would work admirably.

- BT does not carry out its business like that.

Its CAPEX spending on stocking up on say, fibre optical gear to replace copper does not see loads of customer cash coming in for some time into the future after incurring that liability up front.

Now there probably are parts of BT’s operation where your suggestion proves to suffice - but only if it’s a TEMPORARY measure into Negative Capital. If it becomes long term then it will damage certain types of businesses irrevocably increasing net debt out of control (to cope) and bringing the company to its knees.

Another situation where your suggestion might work in BT is when Negative Capital is not working as you suggest but is very damaging. However, as long as all other liquidity metrics are in their safe zone, then maybe Negative Working Capital on it’s own, could be safely ignored for somewhat longer without issue.

(Continues >>>)

Busy for rest of this and next week, so before I get tied up on other chores elsewhere:

- - - - - - - - - - -

Wished I’d looked again at BT earlier, rather than only being alerted by Alison Kirby’s Queen Boudica, (BOUDICA! BOUDICA!) speech, that went round the circuits.

First up is the Revenue. As a previous ‘old hand’ investor in BT, the dramatic “turnaround” in BT’s revenue leaves me almost speechless. So suddenly - after a poor 2023. The continual retracing of revenue virtually non-stop since approx 2016, led to revenue hitting absolute rock bottom in:

2023 @ £20,699m

Alison Kirby (BOUDICA! BOUDICA!) revealed a turnaround in revenue doing a skidding handbrake turn, coming in with:

2024 @ £20,835m.

Well one swallow doesn’t make a summer but it’s the forecasts for future revenue that build on that dramatic turnaround with this 2025 trading year having a market guidance target of:

2025 @ £20,852m

Okay a small increase only - but that is sacrilegious to long term observers. A gain? Really? - at BT? Humpf!

But the turnaround trend is confirmed as official policy with the 2026 market guidance given as:

2026 @ £20,932m

That’s hinting at a potential . . . . NOoo, surely not £21b next?

And sure enough the 2027 guidance available from BT’s site is showing:

2027 @ £21.05b !

£21b Revenue? BACK IN THE GAME! (If achieved).

All of it in small incremental steps - eminently achievable if the market guidance holds.

Net Profit is equally impressive growing from that unimaginable low of £855m in 2023 to the (potential) £1.6b area in 2027. Maybe more slowly, but on the road to the old-school £2b Net Profit days, again?

I can’t correlate that incredible turnaround with the dire (IMO) cash flow situation.

I’ve already penciled in an autumn buy to give me more time; not chasing the SP.

There’s also a potential for a few entry opportunities this summer, so letting those brew, autumn is the last train leaving the station (it already has - but the liquidity problem still concerns me). So just set an opportunistic buy order limit at a keen price should something from the pattern-recognition cupboard trigger from the Queen Boudica speech day.

Surprised no one’s commented on the obvious SP pattern that exploded on Alison’s big-day reveal - it offers a definite future entry date /or top-up opportunity. How’s your pattern recognition? Can you guess the pattern I’ve just referred to?

All these are delay decisions until I receive a response from my email to BT.

- Oh one other thing that surprised me. The fact that it can be true - how easy it is, to make direct phone contact with BOD directors :)

Contrary to the notion that thousands of callers beleaguer the directors personally, the fact is - no one does. Hence straight through in 1.5 seconds!

- Despite the CFO turning on his table top, telephonic noise switch inspired by Graham Norton's infamous chair :)

Below is a list of the key ratios I’ve been referring to in previous posts, in order to to get a handle on how the liquidity of cash/ cash flow and Net debt are all coping against accepted norms of acceptable tolerance, or exceeding guidance on what is tolerable.

Trouble is they are often at odds with what others might hold to be accurate. And vice versa. It’s just that due to the complicated (very) IFRS accountancy changes. Many companies are being forced to display certain data under different headings to please regulatory authorities.

Same with the ratio’s I refer to - they are shepherded into groupings to reveal options that best serve the investor, to gain a more useful picture of what the data providers consider to be the true situation.

One of Fleccy’s posts helpfully details the changes (IFRS) that in this example Vodafone, reluctantly make compared to how they historically reported their results. Similarly, but in a different direction - in my subscription package ratio’s, I notice similar wording but changing things to better serve the investor! In other words which of these is a true picture? - Is a cup half full or half empty? Both are correct.

For instance I have a reading of “true” Net Debt showing £20.7b whereas BT has arranged its finances to (legally) display Net debt just a tad lower.

Anyway, here are the 7 ratios (mentioned in my posts) to look out for, if you see them mentioned in the media at each trading update - over the next 5 years:

Liquidity:

CURRENT RATIO

QUICK RATIO

INTEREST COVER

Leverage

NET GEARING

WORKING CAPITAL

CASH

NET DEBT

You might find some free sites displaying some of them, but unlikely to show them all unless you buy a subscription from them.

There’s only a single figure per metric to look at (so easy-peasy for investors) but all of them should be considered together. Pretty sure BT doesn’t have these metrics on display, but online searches say they do.

Googling helps with descriptions of each metric.

" “ Talking about CPI, it's worth looking at guys, they're introducing cuts to increase profit margin from around 4% to 6-8%. A company that generates £2.6billion in revenue. The current market cap is around £230m. All the best imho “

- - - - - - - - - - -

- Have you told them it made a loss last year?

Here I am worried about BT’s 165% Leveraged Net Gearing. What the hell am I worrying about when CPI is currently leveraged to infinity and beyond at 500%!

Can hardly believe my eyes - is it a Guinness book of records? - Net Gearing is at 500% !!!!

Working Capital doesn’t exist (like BT) worse it’s Negative Working Capital - and been Negative for more years than BT has, and a few years ago was higher than BT’s is today with CPI back then at -£1.2b!

(Although currently it’s less than BT’s - but still Negative anyway).

And yet it’s only barely more than a 1/10th the size of BT’s revenue.

All the liquidity metrics - all of them - are red flagged to indicate cash flow issues - whilst BT's are nowhere near as bad as CPI's are!

Geezalou mate, grab what you can and head for the hills because if CPI is still solvent in 2 years I’ll be a monkey’s uncle!

In fact if it is still standing in two years - I demand you hunt me down and tell me it’s still operating. Because I’ll be straight down to the financial metrics shop demanding a refund!

Thanks Fleccy, but I meant the quick-visual Investor friendly, Ratio metrics. They can have both now :)

Hi Fleccy @

“ With a company like BT it isn't as simple as just looking at working capital Velo, “

- Yep, I already know, agreed :)

You’ll have seen my analysis by now, so I assume you’ve seen all the metrics I’ve reviewed, not just (Negative) Working Capital?

————————————————

“. . . are you getting your negative £1 Billion working capital figure by subtracting Current Liabilities from Current assets?”

- Correct. Yes I have. Or more correctly not me, but my computer has :)

If that formula wasn’t copied from Google but retrieved straight from your general knowledge, then I’m going to be more than seriously impressed Fleccy :)

————————————————

“ I don't believe looking at one section of the balance sheet paints an accurate picture in itself, with the most important figure's being Free cash flow and Net Debt incorporating everything. . . “

- That’s quite right. I can assure you, that all you mention you will find 100% fully analysed in my review posts.

By the way, before I sign off for this month - I intend listing all the necessary cash flow metrics again, in list form in one post, so anyone can print them off, if they wish.

——————————————-

“ Velo I saw your 11:53 post and responded to it at 16:00, where do you get your greater than £1 Billion Working capital figure from and why do you believe cash flow isn't safe? “

- Already covered above, yes? Oh sorry missed the last bit

Not safe because every liquidity metric is red flagged. Not one, but the whole damn lot! Never seen that on BT - ever! So its most concerning to me.

Maybe the upcoming July Q1 reveal, might show some of the first positive receipts coming in? Once these metrics come out of the red flag zone I will post the update here. I hope and am looking to see the red lights go out one by one.

——————————————

*** Velo can you clarify the following:

"Discovered some disturbing liquidity/Cash Flow issues, that are so dire that I'm going to directly contact the Finance Director tomorrow"

"where she announces a 5 year plan to attend to the matter of improving cashf low - so she knows it's a serious problem!"

"However, on paper the figures are dire. The comments so far from the management and the bare figures reported, do not synchronise with an "it's okay" outlook"

There was some scaremongering in that post, so you really need to explain your thinking. ***

- Okay, both a further query or two and this one seem to be going over the same ground. Thought it was different queries. Sorry about that. My fault.

If I’d answered your queries sooner it would have saved you having to repeat yourself.

Main reason I took so long to reply was I knew my analysis post of a couple of pages would answer your questions. I hope so.

As for accusing me of scaremongering others :) Sorry if it came over like

Hi Phatcatzout, kind of you to say so, thank you. Fleccy beat me to it - an excellent post there Pht! :)

“ So my question is , taking into account all of the above , surely this will solve the FCF problem over time and free up huge amounts of wonga? “

- - - - - - - -

Well it will definitely help, for sure. And yes, you would think so.

We all need just a little more clarity on how much is actually needed in the first place, to put matters right. After all, if something like this happened in our own homes and after the dust settled we found the bailiffs were at the door, the first thing we would want to know is: What’s the damage? How much do we owe you to make this go away?

We can’t see them off with: Well we’ve got bits and pieces of more cash coming in at different times, but we’re not quite sure how much in total, but it will be a bit more than we’re receiving now. Doesn’t cut it does it?

At the moment it’s like an additional credit card has been handed out and someone has just been spend, spend, spending, and muttering: Oh it all sort itself out. Years later - that’s now the new CEO’s responsibility to reconcile. Every announcement from her has to be scrutinised for as much info as possible on cash flow.

Shame about the top line (Revenue) it’s really belting along and missing out on the praise - not to mention the bottom line too.

A turning point in trading results has been achieved, after waiting a full decade - this is it! The kind of trading results that past holders could only dream of - it’s happening now and forecast to continue - don’t think I’ve ever seen such bullish forecasts since before 2016!

All, and I mean ALL, long term trends, are strongly bullish, but all eyes have been forced to look at the negatives - the cash flow.

Never seen BT’s trading results look this good.

But someone failed to spreadsheet the future cash flow requirements. It’s mandatory for every business to do one. Fleccy could do it. I could do it. You could do it. Why didn’t BT? Doesn’t mean the shortfall wouldn’t have happened. However, you would have been more than aware AND prepared for the shortfall before it happened - and not after it had already emptied the bank account!

Revenue and Net Profit have at long last turned a corner. The market guidance forecasts are on course to eventually challenge the better years of yesteryear. Forecasts stretching into 2027, are more than excellent. All the analysts are on board and bullish as hell!

But a wee peak at the cash table at the bottom of the trading consensus on BT’s own website shows solid red columns and rows, on all the cash flow entries. Ruining it all - bar one single, forsaken, lonely and neglected, little solitary black line only.

There’s certainly a job and a half to be done by the CEO.

- - - - - -

One more Query to reply to (Fleccy; later) and then I'm done for this month :)

Just clearing out my desk of outstanding queries -

Aus3009 @ 21/6/24:

“ Velo - so what you are saying is. By your calculations debt is high, but worryingly BT doesn’t have enough cash to run its business so BT will need to have further debt to keep the wheels turning?

But . . . “

- - - - - - - -

Hi Aus,

Well Net Debt is generally agreed by all and sundry to be very high, and the leveraged Net Gearing backs that up. So no surprises there.

But no, even more debt should not be an automatic first response - other initiatives might tide things over until innate natural cash flow, from reduced CAPEX spending, starts seeping through the system etc., and other items which I imagine they’re already on to, similar to invoice factoring (which I don’t think is necessary as BT’s customers pay a month in advance anyway) or sitting on creditors invoices for one extra month before paying etc.,

General expense/cost reductions kind of thing would help, and again, employee head count is being reduced, cutting back spending on expenses on anything that is not essential, I guess. But yes, generally your post has just about the gist of it all. The current cash flow situation is pumping, creaking, at maximum capacity, and literally demands to be seen to - like yesterday!

It’s not a case of waiting 5 years for it only then to be sorted, the spending on CAPEX has now peaked, so maybe not from the upcoming Q1 first quarter trading results which matures next week and will be published next month on July 25th - but certainly after the H1 trading results are published on November 7th, I would expect to see the results of some of that reduced CAPEX spending to show up in an increased cash on hand measurements etc.,

Might be something come through showing up in the Q1 next month but it would be tiny. H1 should reveal a tad more significant movement, I would guess. It’s the November Trading update I’ve personally set my sights on, for the first of these promised reduced CAPEX benefits to be seen and measured.

Will be lots of guessing from every analyst and media journo under the sun at the H1 update as to whether natural cash flow improvement is sustainable.