Deliver Your News to the World

Trading update for the nine months to 31 December 2019


WEBWIRE

“BT delivered results slightly below our expectations for the third quarter of the year, but we remain on track to meet our outlook for the full year."

BT Group plc (BT.L) announced its trading update for the nine months to 31 December 2019.

Key strategic developments - continued delivery in line with strategy:

  • Ofcom’s consultation on the Wholesale Fixed Telecoms Market Review is an important step forward in incentivising investment in the UK’s digital infrastructure and toward enabling BT to significantly increase its FTTP target

  • Exclusive rights to UEFA Champions League, UEFA Europa League and UEFA Europa Conference League secured until 2024

  • On-shoring of BT brand sales and service calls completed; nearly 500 retail stores now BT/EE dual branded

  • Our Better Workplace programme confirmed further long-term locations in Birmingham and Bristol

  • Sale agreed of our domestic operations in Spain

  • Important clarification on use of certain vendors in 5G and full fibre networks - estimated impact of c.£500m over 5 years

Operational:

  • 5G now live in over 50 locations; EE found to have broadest 5G network by RootMetrics

  • Openreach accelerates FTTP build at c.26k premises passed per week; 2.2m FTTP premises passed to date

  • Openreach awarded two of three lots to provide superfast speeds to Scotland; vast majority of build to be FTTP

  • Consumer fixed ARPC £38.2, down 4% year on year due to decline in voice revenue; postpaid mobile ARPC £20.3, down 5% due to impact of regulation and continued trend towards SIM-only; RGUs per address 2.38

  • Postpaid mobile churn remains low at 1.3% in Q3 despite impact of auto switching; fixed churn at 1.3% in Q3 down from 1.4% in prior year following customer experience improvements and new pricing strategy

Financial:

  • Reported revenue £17,246m and adjusted2 revenue £17,192m, both down 2%1 primarily due to ongoing headwinds from regulation, competition and legacy product declines

  • Reported profit before tax of £1,911m; adjusted2 EBITDA £5,900m, down 3%1, due to the fall in revenue, higher spectrum fees, investment in customer experience and higher operating costs in Openreach

  • Normalised free cash flow2 of £1,000m, down 42% due to increased cash capital expenditure, deposit for UEFA club football rights, higher interest and tax payments and working capital, partially offset by one-off cash flows

  • Capital expenditure £2,877m. Up £251m excluding BDUK funding deferral, driven by fixed and mobile network investment

  • Overall financial outlook maintained; we expect normalised free cash flow2, for timing reasons, to be in lower half of the £1.9bn - £2.1bn full year guidance range

Philip Jansen, Chief Executive, commenting on the results, said

“BT delivered results slightly below our expectations for the third quarter of the year, but we remain on track to meet our outlook for the full year.

“We continue to invest in the business. During the quarter we launched Halo, the UK’s ultimate converged plan, which will give homes and businesses the best connection and service. We’ve continued to use our national scale and local presence across the UK to provide customers with the best possible experience, for example by meeting our promise to answer all customer calls in the UK and Ireland and bringing BT sales and service back to the high street in nearly 500 BT/EE stores.

“Underpinning the ongoing development of market-leading propositions, we continue to invest in the best converged network. We welcomed the direction of Ofcom’s recent consultation, which is an important step forward towards a widely-shared ambition to invest in fibre across the whole of the UK. We’re also investing in 5G, making it available in over 50 locations, with the first customers enjoying a great experience.

“The security of our network is paramount for BT. We therefore welcome and are supportive of the clarity provided by Government around the use of certain vendors in networks across the UK and agree that the priority should be the security of the UK’s communications infrastructure. We are in the process of reviewing the guidance in detail to determine the full impact on our plans and at this time estimate an impact of around £500 million over the next 5 years.

”I’m really excited about the long-term prospects for this great company and I‘m confident our plans will enable us to be bolder, smarter, and faster to ensure that we remain successful and create a better BT for the future"

About BT

BT’s purpose is to use the power of communications to make a better world. It is one of the world’s leading providers of communications services and solutions, serving customers in 180 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to its customers for use at home, at work and on the move; broadband, TV and internet products and services; and converged fixed-mobile products and services. BT consists of four customer-facing units: Consumer, Enterprise, Global and Openreach.

For the year ended 31 March 2019, BT Group’s reported revenue was £23,428m with reported profit before taxation of £2,666m.

British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on the London stock exchange.

For more information, visit www.btplc.com


( Press Release Image: https://photos.webwire.com/prmedia/7/254182/254182-1.jpg )


WebWireID254182





This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.