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SKY Sky

1,727.50
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Sky LSE:SKY London Ordinary Share GB0001411924 ORD 50P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 1,727.50 1,727.00 1,727.50 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

BT Profit Beats Forecasts -- Update

29/10/2015 9:53am

Dow Jones News


Sky (LSE:SKY)
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(Adds detail.)

 

By Simon Zekaria

 

LONDON--BT Group PLC (BT.A.LN) Thursday lauded its strategic direction as the U.K.-based telecommunications group recorded a forecast-beating rise in quarterly profit, with demand for its fiber-optic Internet broadband and sports television channels boosting business.

The U.K. company's net profit in its second quarter, ended Sept. 30, rose to 525 million pounds ($801 million), compared with a market consensus forecast of GBP481 million, up from GBP446 million in the same period a year earlier.

BT's closely-watched earnings before interest, taxes, depreciation and amortization on an adjusted basis fell 1% year-on-year to GBP1.44 billion, hit by spending on its sports TV business.

Revenue in the second quarter on an adjusted basis was unchanged at GBP4.38 billion, higher than a consensus market forecast of GBP4.33 billion. Excluding exceptional items, foreign exchange movements and acquisitions or disposals, as well as transit costs, revenue rose 2%.

On a reported basis, revenue from global services--BT's largest division, which supplies information technology to large multinational companies, organizations and governments--fell 5%, hit by lower sales in the U.K., U.S. and Canada, amid public sector cutbacks and lower outsourcing of services.

Still, consumer revenue rose 7%, up from 3% growth in the previous three months. BT says it has 3.4 million retail fiber broadband customers, adding 212,000 in the quarter. It also added 106,000 TV customers.

"Our strategy is delivering and our results show we're on track to achieve our outlook for the year," said Chief Executive Gavin Patterson.

BT battles media rivals such as Sky PLC (SKY.LN) in the U.K. for a share of soccer TV viewers, which is seen as key to attract consumers to its TV channels. As well as covering domestic soccer, BT has spent billions of dollars to secure the rights to live European soccer in a bid to take on Sky's longstanding dominance of soccer broadcasting in the U.K. BT's sports-broadcasting platform is also key to its core broadband business, compensating for declining fixed-line telephony customers.

Mr. Patterson said BT has seen "good demand" for its channels showing European soccer. "Its contribution has been better than we expected," he added, without providing further details.

Key to BT's consumer revenue growth is building customer loyalty by connecting products and services for retail bundling, such as high-definition television and mobile. These multi-service packages keep down 'churn,' or the rate at which customers leave services. Wednesday, BT received a boost for this strategy after its proposed multi-billion dollar acquisition of mobile operator EE was provisionally cleared without competition remedies by U.K. antitrust regulators.

"Mobile is another growth area and I am pleased our consumer customer base now stands at more than 200,000," said Mr. Patterson, without elaborating on the company's growth targets or marketing strategy for its consumer mobile operation.

Still, BT faces calls from rivals that its infrastructure division Openreach--which runs a countrywide network that peers like Sky and TalkTalk Telecom Group PLC (TALK.LN) rely on to serve their broadband customers--should be broken off from the group on competition grounds. Communications regulator Ofcom is reviewing the matter and will submit its findings next year. BT says keeping Openreach as part of the company is key to investing in the country's communications infrastructure.

The group recommended an interim dividend of 4.4 pence, up 13%. BT expects to grow its fiscal-year dividend per share by 10%-15%.

At 0859 GMT, BT shares were down 0.6% at 466 pence, valuing the company at GBP39.2 billion.

Jefferies analyst Jerry Dellis said the results are solid, with encouraging trends for the company's consumer business, but noted there is no mention of the dividend policy beyond next year.

 

Write to Simon Zekaria at simon.zekaria@wsj.com

 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires

October 29, 2015 05:38 ET (09:38 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.

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