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BT.A Bt Group Plc

106.00
-0.15 (-0.14%)
Last Updated: 10:25:06
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Bt Group Plc LSE:BT.A London Ordinary Share GB0030913577 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.15 -0.14% 106.00 105.95 106.05 106.55 104.60 105.50 2,870,141 10:25:06
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Phone Comm Ex Radiotelephone 20.92B 1.91B 0.1916 5.53 10.54B

BT Group PLC Half-year Report (1140S)

02/11/2023 7:00am

UK Regulatory (RNS & others)


Bt (LSE:BT.A)
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From Sep 2023 to Mar 2024

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TIDMBT.A

RNS Number : 1140S

BT Group PLC

02 November 2023

Results for the half year to 30 September 2023

BT Group plc

2 November 2023

 
Philip Jansen, Chief Executive, commenting on the results, said 
 "These results show that BT Group is delivering and on target: 
 we're rapidly building and connecting customers to our next generation 
 networks, we're simplifying our products and services, and we're 
 now seeing predictable and consistent revenue and EBITDA growth. 
 "We've strengthened our competitive position with the launch of 
 both New EE and our renewed strategy in Business, and Openreach 
 has now built full fibre broadband to more than a third of the 
 UK's homes and businesses with a growing connection rate. Our transformation 
 programme has now delivered GBP2.5bn in annualised savings, well 
 on track to meet our GBP3bn savings target by FY25. 
 "Our delivery in the first half means we are confirming our financial 
 outlook for FY24 with normalised free cash flow now expected towards 
 the top end of the guidance range, and we are declaring an interim 
 dividend of 2.31 pence per share. BT Group has a bright future 
 and I'm pleased to be handing the baton to Allison Kirkby early 
 in the new year. She knows the sector, she knows the company and 
 she's the right person to lead BT Group from this position of operational 
 strength." 
 

Continued strong execution of our strategy

-- FTTP build rate accelerated to 66k per week delivering a record of 860k premises passed in the quarter, FTTP footprint is now expanded to 12m premises with a further 6m where initial build is underway

-- Strong customer demand in Openreach for FTTP with net adds of 364k in Q2, bringing take-up rate to 33%

-- Openreach broadband ARPU grew by 10% year-on-year due to price rises and increased volumes of FTTP; Openreach broadband line losses of 255k in H1, a 1% decline in the broadband base; whilst we continue to target a decline of around 400k in FY24, softer market conditions increase the risk that losses will be above this level

-- Consumer broadband ARPU for the year to date increased 4% year-on-year and Consumer postpaid mobile ARPU for the year to date increased 9% year-on-year; churn for the year to date remains stable for both broadband and postpaid mobile at 1.1% and 1.0% respectively

-- In October 'New EE' was launched with a modern digital platform and a set of converged products and services

-- Retail FTTP base grew year-on-year by 48% to 2.2m of which Consumer 2.1m and Business 0.1m; 5G base 9.9m, up 42% year-on-year

-- Cost transformation on track with gross annualised cost savings of GBP2.5bn since April 2020 against our GBP3bn target, with a cost to achieve of GBP1.3bn against a target of GBP1.6bn

-- Continued focus on creating standout customer experiences with BT Group NPS of 22.7, up 1.8pts year-on-year

Adjusted(1) Revenue and EBITDA growth:

-- Reported revenue GBP10.4bn, in line with the prior year; adjusted(1) revenue GBP10.4bn, up 3% on a pro forma(2) basis due to increased fibre-enabled product sales, inflation-linked pricing and improved lower margin trading in Business partially offset by legacy product declines

-- Adjusted(1) EBITDA GBP4.1bn, up 6%; and up 4% on a pro forma(2) basis with revenue flow through and strong cost control more than offsetting cost inflation and one-off items in the prior year; Business EBITDA decline due to increased input costs and legacy high-margin managed contract declines

-- Reported profit before tax GBP1.1bn, up 29% largely due to factors driving adjusted(1) EBITDA growth

-- Reported capital expenditure ('capex') GBP2.3bn, down 11% with lower fixed network spend driven by lower FTTP build unit costs; cash capex of GBP2.5bn also down 11%

-- Net cash inflow from operating activities GBP2.3bn; normalised free cash flow(1) GBP0.5bn, up GBP0.4bn primarily due to GBP0.2bn increase in adjusted EBITDA(1) and GBP0.3bn decrease in cash capital expenditure partly offset by GBP(0.1)bn net working capital outflow; net working capital movements includes GBP359m from the sale of cash flows of contract assets relating to mobile handsets as well as GBP(220)m from lower utilisation of a supply chain financing programme

-- Net debt GBP19.7bn, (31 March 2023: GBP18.9bn), increasing mainly due to pension scheme contributions with net free cash flow for the first half of FY24 substantially offsetting the payment for the final dividend of FY23

-- Gross IAS 19 deficit of GBP3.9bn, up from GBP3.1bn at 31 March 2023 mainly due to the increase in real interest rates and narrowing of credit spreads over H1, partly offset by deficit contributions

-- Interim dividend for FY24 of 2.31 pence per share (pps) in line with our policy of paying 30% of prior year's full year dividend

-- FY24 Outlook: Adjusted(1) revenue and EBITDA growth on a pro forma basis; capital expenditure excluding spectrum of around GBP5.0bn; normalised free cash flow towards the top end of GBP1.0bn-GBP1.2bn range.

(1) See Glossary on page 3 .

(2) See 'Prior period comparatives' section on page 2 for background on pro forma comparatives.

 
Half year to 30 September                          2023                     2022                     Change 
                                 ----------------------  ----------------------- 
Reported measures                                  GBPm                     GBPm                          % 
Revenue                                          10,407                   10,366                          - 
Profit before tax                                 1,076                      831                         29 
Profit after tax                                    844                      893                        (5) 
Basic earnings per share                           8.6p                     9.1p                        (5) 
Net cash inflow from operating 
 activities                                       2,324                    2,911                       (20) 
Interim dividend                                  2.31p                    2.31p                          - 
Capital expenditure                               2,321                    2,613                       (11) 
-------------------------------  ----------------------  -----------------------  ------------------------- 
 
Adjusted measures 
Adjusted(1) Revenue                              10,414                   10,368                          - 
Adjusted(1) EBITDA                                4,094                    3,873                          6 
Pro forma(2) Revenue                             10,414                   10,130                          3 
Pro forma(2) EBITDA                               4,094                    3,944                          4 
Adjusted(1) basic earnings per 
 share                                            10.3p                    10.0p                          3 
Normalised free cash flow(1)                        456                       64                        613 
Net debt(1,3)                                    19,689                   19,042                    GBP647m 
-------------------------------  ----------------------  -----------------------  ------------------------- 
 

Customer-facing unit updates

 
                          Adjusted(1) revenue               Adjusted(1) EBITDA                 Normalised free 
                                                                                                 cash flow(1) 
                   ---------------------------------  ------------------------------- 
                                        2022                             2022                             2022 
Half year                       Pro forma(2)                     Pro forma(2)                     Pro forma(2) 
 to 30 September      2023   re-presented(2)  Change   2023   re-presented(2)  Change   2023   re-presented(2)  Change 
----------------- 
                      GBPm              GBPm       %   GBPm              GBPm%          GBPm              GBPm       % 
-----------------  -------  ----------------  ------  -----  ----------------   -----  -----  ----------------  ------ 
Consumer             4,903             4,754       3  1,347             1,2964           798               499      60 
Business             4,100             4,041       1    806               903    (11)   (65)                12   (642) 
Openreach            3,053             2,836       8  1,936             1,735      12    152                59     158 
Other                    8                14    (43)      5                10    (50)  (429)             (506)      15 
Intra-group 
 items             (1,650)           (1,515)     (9)      -                 --             -                 - 
-----------------  -------  ----------------  ------  -----  ----------------   -----  -----  ----------------  ------ 
Total               10,414            10,130       3  4,094             3,9444           456                64     613 
-----------------  -------  ----------------  ------  -----  ----------------   -----  -----  ----------------  ------ 
 
 
                                      2022                             2022                            2022 
Second quarter                Pro forma(2)                     Pro forma(2)                    Pro forma(2) 
 to 30 September    2023   re-presented(2)  Change   2023   re-presented(2)  Change  2023   re-presented(2)  Change 
----------------- 
                    GBPm              GBPm       %   GBPm              GBPm%         GBPm              GBPm       % 
-----------------  -----  ----------------  ------  -----  ----------------   -----  ----  ----------------  ------ 
Consumer           2,480             2,406       3    674               6642 
Business           2,073             2,074       -    420               469    (10) 
Openreach          1,527             1,419       8    971               872      11 
Other                  3                 7    (57)    (4)               (6)      33 
Intra-group 
 items             (833)             (755)    (10)      -                 -- 
-----------------  -----  ----------------  ------  -----  ----------------   -----  ----  ----------------  ------ 
Total              5,250             5,151       2  2,061             1,9993          687               269     155 
-----------------  -----  ----------------  ------  -----  ----------------   -----  ----  ----------------  ------ 
 

(1) See Glossary on page 3 .

(2) See 'Prior period comparatives' section below for more information on pro forma and re-presented measures.

(3) Net debt was GBP18,859m at 31 March 2023.

Prior period comparatives

Throughout this release, comparative financial information for the half year to 30 September 2022 ('FY23') has been re-presented to reflect the merger of our Global and Enterprise business units to form Business; and the change in the methodology used to allocate shared Network, Digital and support function costs across our units, which improves the relevance of our financial reporting by better allocating internal costs to the drivers behind those costs. These adjustments are made pursuant to IFRS accounting requirements, for more information see note 1 to the condensed consolidated financial statements on page 15 .

In addition, the group and operating review sections of this release present comparative financial information for the Consumer customer-facing unit and BT Group overall on an unaudited 'pro forma' basis. This reflects adjustments that estimate the impact as if trading in relation to BT Sport has been equity accounted in FY23, akin to the Sports JV being in place historically. Analysis on a pro forma basis enables comparison of results on a like-for-like basis.

The Additional Information on page 29 presents a bridge between financial information for the half year to 30 September 2022 as published on 3 November 2022, and the comparatives presented in this release. For further information see bt.com/about for separate publications covering the formation of Business and cost allocation changes, (published 27 June 2023), and the pro forma adjustments (published 18 October 2022).

Glossary

 
Adjusted             Adjusted measures (including adjusted revenue, adjusted 
                      operating costs, adjusted operating profit, and adjusted 
                      basic earnings per share) are before specific items. 
                      Adjusted results are consistent with the way that 
                      financial performance is measured by management and 
                      assist in providing an additional analysis of the 
                      reporting trading results of the group. 
Adjusted EBITDA      Earnings before interest, tax, depreciation and amortisation, 
                      before specific items, share of post tax profits/losses 
                      of associates and joint ventures and net finance expense. 
Free cash flow       Net cash inflow from operating activities after net 
                      capital expenditure. 
Capital expenditure  Additions to property, plant and equipment and intangible 
                      assets in the period. 
Normalised           Free cash flow (net cash inflow from operating activities 
 free cash flow       after net capital expenditure) after net interest 
                      paid, payment of lease liabilities, net cash flows 
                      from the sale of cash flows related to contract assets, 
                      monies received as prepayment for the sale of redundant 
                      copper, dividends received from non-current assets 
                      investments, associates and joint ventures, and net 
                      purchase or disposal of non-current asset investments, 
                      before pension deficit payments (including their cash 
                      tax benefit), payments relating to spectrum, and specific 
                      items. It excludes cash flows that are determined 
                      at a corporate level independently of ongoing trading 
                      operations such as dividends paid, share buybacks, 
                      acquisitions and disposals, repayment and raising 
                      of debt, cash flows relating to loans with joint ventures, 
                      and cash flows relating to the Building Digital UK 
                      demand deposit account which have already been accounted 
                      for within normalised free cash flow. For non-tax 
                      related items the adjustments are made on a pre-tax 
                      basis. 
Net debt             Loans and other borrowings and lease liabilities (both 
                      current and non-current), less current asset investments 
                      and cash and cash equivalents, including items which 
                      have been classified as held for sale on the balance 
                      sheet. Amounts due to joint ventures, loans and borrowings 
                      recognised in relation to monies received from the 
                      sale of cash flows of contract assets and as prepayment 
                      for the forward sale of redundant copper are excluded. 
                      Currency denominated balances within net debt are 
                      translated into sterling at swapped rates where hedged. 
                      Fair value adjustments and accrued interest applied 
                      to reflect the effective interest method are removed. 
Service revenue      Earned from services delivered using our fixed and 
                      mobile network connectivity, including but not limited 
                      to, broadband, calls, line rental, TV, residential 
                      sport subscriptions, mobile data connectivity, incoming 
                      & outgoing mobile calls and roaming by customers of 
                      overseas networks. 
Re-presented         FY23 comparatives throughout this release have been 
                      re-presented to reflect: 
                      (i) the merger of our Global and Enterprise business 
                      units to form Business; and 
                      (ii) the change in our methodology used to allocate 
                      shared Network, Digital and support function costs 
                      across our units. 
                      Refer to the 'Prior period comparatives' section on 
                      page 2 and note 1 to the condensed consolidated financial 
                      statements on page 15 for more details, and to Additional 
                      Information on page 29 for a bridge between previously 
                      published FY23 financial information and re-presented 
                      numbers. 
Pro forma            Unaudited pro forma results estimate the impact on 
                      the group as if trading in relation to BT Sport has 
                      been equity accounted in FY23, akin to the Sports 
                      JV being in place historically. 
                      Refer to the 'Prior period comparatives' section on 
                      page 2 for more information and to Additional Information 
                      on page 29 for a bridge between previously published 
                      financial information (re-presented as noted above) 
                      and pro forma numbers. 
Specific items       Items that in management's judgement need to be disclosed 
                      separately by virtue of their size, nature or incidence. 
                      In the current period these relate to changes to our 
                      assessment of our provision for historic regulatory 
                      matters, restructuring charges, divestment-related 
                      items and net interest expense on pensions. 
-------------------  ------------------------------------------------------------- 
 

We assess the performance of the group using a variety of alternative performance measures. Reconciliations from the most directly comparable IFRS measures are in Additional Information on pages 29 to 31.

Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/1140S_1-2023-11-1.pdf

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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END

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