Bt Share Discussion Threads

[hamhamham1] 26/6/2018 10:24

careful. Being in cash now, doesn't mean that I will be in cash forever.
Any recession may last 18 months???
Then pick up some bargain stocks?
I think there will be a big credit crunch but I cannot see hyper inflation coming, who knows, I can always adapt my approach as things develop.
There will always be bargains to be had in property or shares when people have to fire sale the excessive assets they have built up during the good times when the big cash call comes.

[action] 26/6/2018 10:23

looking to increase holding to collect divi in BT in pull back. I will trade carefully but can not avoid attraction of Divi


BT Support levels are 210 , 201 .

[encarter] 26/6/2018 09:57

Sold out yesterday at a small profit. Imho the next few months could be dark.Oct 1907: panic of 1907Oct 1929: wall Street crashOct 1987: black mondayOct 1989: friday 13th crashSept 1992: black wednesdaySept 2008: financial crisisI intend to go to 90% cash by August.

[action] 26/6/2018 09:28

Starting from 27 July, BT would also begin publishing quarterly financials.

Is this positive or as Warren Buffet says distraction and waste of management time and energy?

[hamhamham1] 26/6/2018 08:35

I am sure this must have been posted here?
(appologies if it already has, I missed it)

[spendalot] 26/6/2018 08:11

Re 29737: I assume OFCOM and the other telco's/ISP's gunning for BT had no input whatsoever in reducing the margins, am I correct.

[hamhamham1] 26/6/2018 07:34

I think 220p will be hit today, let's see. - it's 50/50 - and pointless me saying it really :)
Did this article get posted here?



Personally, I’ve always avoided BT (LSE: BT.A) as an investment because, while the company does have some desirable traits, it also has plenty of other negative qualities.

The most significant sticking point for me has always been its debt. I try to avoid companies with high levels of debt because they lack financial flexibility. At the last count, the group reported a net debt figure of £9.6bn, and that’s excluding the pension deficit of £11.3bn.

Taking action
The good news is, the company is taking action to reduce it’s retirement obligations. Last month BT agreed to a 13-year recovery plan with the trustees of the pension scheme. Under the terms of the deal, the group will make payments of £2.1bn by March 2020 with a further £900m a year due after this initial balloon payment for 10 years. Management has also offered to raise an additional £2bn for the fund by issuing more bonds.

This is a bitter pill to swallow for investors as it will reduce the amount of cash available for distribution. But by cleaning up part of its balance sheet, the company is heading in the right direction.

At the same time, over the next few years, BT is planning to undertake a massive restructuring of its business. As part of this, the firm is planning to move from its London headquarters site and cut 13,000 back office and middle management jobs.

Unfortunately for staff who will lose their jobs, this appears to be the right course of action. Compared to international peers, BT looks like a bloated corporate beast. The company’s operating margin has steadily declined over the past five years from 15.5% to 13.3%. For comparison, US peer Verizon Communications reported an operating margin of 21% for its last financial year. Telecom Italia margin is 16%, and Swisscom AG sits in the middle with 18%.

The root of the problems
I believe the bulk of BT’s issues can be traced to the decisions of its former CEO Gavin Patterson. Since he took charge in 2013, the group’s revenue has increased from £18.3bn to £23.7bn, but higher operational spending has kept net profit flat.

Mr Patterson’s empire building has done the company no favours. His decision to spend more than £5bn on sports rights and then £12.5bn buying mobile provider EE starved the group of cash, leading to higher debt and underinvestment in its core telecoms business. And as I noted above, there’s little to show for this spending. Revenue is higher but so are costs. Meanwhile, net debt has jumped by more than £2bn, or 24%, and the number of shares in issue has risen by a fifth, diluting existing holders.

Return on capital employed, a measure of how much profit a company is generating for every £1 invested in the business, has declined from 16.9% in 2014 to 9.7% for 2018.

All of the above leads me to conclude that Mr Patterson has done nothing but destroy shareholder value over the past five years.

In my opinion, BT would be in a much better position today if the company had stuck to its core focus, and rather than investing billions in trying to break into new markets, reinvested the cash into its existing network.

When Mr Patterson took over, BT was the UK’s largest telecommunications provider by far with a dominant and unrivalled position in the market. Competitive advantages only last if a company invests in keeping competitors at bay, which it has failed to do.

Not only is the company now facing attacks on all fronts from multiple competitors, it has also attracted the ire of regulators who believe the business has let down customers by chasing after new markets. Sharon White, head of Ofcom, recently speculated that BT was in danger of going the same way as Kodak and Polaroid unless it stepped up investment in fibre.

Changing of the guard
It finally looks as if the company has got the message. BT is now planning to devote £3.7bn a year to upgrading its mobile and fibre networks. Part of the funding for this will come from cost savings of £1.5bn projected to be achieved from job losses.

What’s more, it’s beginning to look as if it is contemplating winding down its pay-TV operation now Mr Patterson is no longer in charge.

It is believed that the former CEO was forced to step down due to a loss of investor confidence. The Financial Times reported the same set of investors think the firm’s foray into pay-TV, notably the high-priced sports rights binge was a mistake the company should seek to reverse.

All in all, it looks to me as if BT is going to reverse course over the next few years and double down on what it knows best, telecommunications.

By investing in its core network and slowing spending on other expensive ventures, the business should also be able to start substantially reducing its tremendous debt pile — even after taking into account the excess pension payments.

Time to buy?
With this being the case, it looks to me as if the BT share price could be an attractive buy at current levels.

As the group’s problems have built up, its share price has plunged to a low not seen since 2011, dragging the valuation down with it. At the time of writing, the stock trades at a forward P/E of just 7.8, supports a dividend yield of 7.4% and trades at an enterprise value to earnings before interest tax depreciation and amortisation ratio (EV/EBITDA) of 4.7, around half of the telecommunications industry median.

There’s plenty of bad news already baked into this stock price, and in reality, I don’t see much further downside if BT continues to struggle. However, if the group’s turnaround plan starts to yield results, the stock could more than double (based on the EV/EBITDA ratio) as investors return.

[oakville] 26/6/2018 05:16

Buy at £2 and hold.

[hamhamham1] 25/6/2018 20:53

I think the accounting news was ok really, no major impact and now has been explained to the market.
On the other board there are doom mongers trying to over fuss it.
I guess they are either disgruntled old sellers who realised a loss or keen buyers trying to sway the price down for their target buy price. (In regards to the latter, these are just pi investor boards and carry no share price clout, shhhh)

[hamhamham1] 25/6/2018 18:09

The U.K. telecommunications company said it expects the impact on revenue for the current financial year to be in the high tens of millions of pounds, while earnings before interest, taxes, depreciation and amortization are expected to take a hit in the low tens of millions of pounds.

Cash flow isn't expected to be affected by the change in accounting standards, BT said.

On an IFRS 15 basis, BT said that its outlook for adjusted Ebitda--which strips out specific items--is unchanged in a range between 7.3 billion and 7.4 billion pounds ($9.7 billion and $9.8 billion).

[toon1966] 25/6/2018 17:25

BT Group retains full-year 2018/19 outlook after change to IFRS 15

(Sharecast News) - BT Group reiterated its view on the impact that its changeover to the so-called IFRS 15 accounting principle for revenue and cost recognition would have on its results beginning with the 2018/19 fiscal year and is outlook for the coming year.
Under IFRS 15, its full-year revenues would take a hit in the high millions of pounds with operating profits at the EBITDA level expected to be lower by an amount in the low tens of millions, the company said in a statement.

However, there would be no impact on its cash flow.

The telecommunications carrier also reiterated its expectation for a cumulative increase in retained earnings before tax as of 1 April of between £1.1-£1.5bn, resulting in an additional one-off cash tax payment that was to be split equally between 2018/19 and 2019/20.

However, estimates of the impact of adopting the IFRS 15 standard were still being finalised, including those for the final transition adjustment to retained earnings.

Instead of restating prior years' financials, BT chose to reflect the impact of the change from IAS 18 to IFRS 15 in one go in its 1 April 2018 opening reserves.

"BT's outlook for 2018/19 including the impact of IFRS 15 remains unchanged," the company added.

Also on Monday, BT Group published refreshed financial and operational key performance indicators for the previous two fiscal years, in order to improve the visibility on the drivers behind its performance.

Starting from 27 July, BT would also begin publishing quarterly financials.

As of 1604 BST, shares of BT Group were 0.71% weaker at 217.20p.

[the charmer] 25/6/2018 16:44

h ttp://www.proactiveinvestors.co.uk/companies/news/199513/bt-expects-adverse-impact-from-adoption-of-new-accounting-standards-199513.html

[hamhamham1] 25/6/2018 16:01

You could look at the BT share price chart since March 2003 and see that it has been through 2 cycles?

If you divide the cycles time frame into 11ths, then 8 of these are upwards and 3 downwards at the end of the cycle.

The first cycle started in March 2003 and lasted until July 2007 (52 months) and the downward trend lasted from then until March 2009 (20 months).

If that logic was applied in the second recent cycle starting from March 2009, then if 8/11ths took us to Nov 2015 (80 months), then the duration to complete the downwards 3/11ths would be (in this case 30 months) and takes up to the end on May 2018.

And lo and behold this was the low point recently of 203p at the end of May.

It's just an observation and what's in a statistic eh?

[smurfy2001] 25/6/2018 15:21

Very resilient

[hamhamham1] 25/6/2018 15:01

Investors Are Undervaluing BT Group plc (LON:BT.A) By 48.12%

"...This results in an intrinsic value of £4.02."

[montyhedge] 25/6/2018 13:46

Its a shame risk off day for FTSE 100, I know sanctions and tariffs don't effect BT,
being a domestic uk sterling earner, but these would have been over 220p easily today. I say 225p this week is a given in my book.

[hamhamham1] 25/6/2018 12:30

You can rely on the film Terminator when you need a good quote...

[pvb] 25/6/2018 11:22

"Well do ya, punk?"

[hamhamham1] 25/6/2018 10:55

As Dirty Harry would say..."I know what you are thinking, would I rather hold aggressive stocks at multi-year highs or should I hold defensive stocks at multi-year lows, you've gotta ask yourself one question: Do I feel lucky?"

[montyhedge] 25/6/2018 10:39

Like I said UK domestic sterling earners, not effected by US sanctions, are the place to be rotation into these BT my no.1

[montyhedge] 25/6/2018 10:31

A risk off day for the FTSE 100, if this market was up BT would be around 223p this morning, a lot of demand, bears stop losses must kick in at 220p is my view. they are worried, short and caught comes to mind.

[action] 25/6/2018 10:29

RESISTANCE AROUND 219P.