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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.20 | 0.19% | 104.05 | 104.00 | 104.10 | 104.65 | 102.80 | 103.40 | 6,575,753 | 13:37:20 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Phone Comm Ex Radiotelephone | 20.92B | 1.91B | 0.1916 | 5.41 | 10.3B |
TIDMBT.A
RNS Number : 9964T
BT Group PLC
28 July 2022
Trading update for the three months to 30 June 2022
BT Group plc
28 July 2022
Philip Jansen, Chief Executive, commenting on the results, said "BT Group has made a good start to the year; we're accelerating our network investments and performing well operationally. Despite ongoing challenges in our enterprise businesses, we returned to revenue and EBITDA growth in the quarter. "We continued to grow the number of BT and EE customers connected to our next generation networks. We're building our full fibre broadband network faster than ever and we're seeing record customer connections - both ahead of our own expectations. Openreach's full fibre network now reaches over 8 million homes and businesses across the UK and we anticipate increasing our annual build from 2.6 million premises last year to around 3.5 million this year. EE's 5G network covers more than 55% of the country's population. We're achieving continued high customer satisfaction scores thanks to our much improved customer service and the value for money that our products and services represent. "The modernisation of BT Group remains on track. We are delivering and notwithstanding the current economic uncertainty we remain confident in our outlook for this financial year."
Key strategic developments:
-- Fibre build and connection continues at pace, beyond our expectations, with record quarterly FTTP build of 763k and net adds of 302k
-- Finalised our FTTP co-provisioning agreement with Sky
-- EE was voted best network by RootMetrics for the ninth year running and came top in every category measured; our 5G ready base is now at 7.7m
-- Price rises to support investment in the network and offset cost inflation; we have continued to raise awareness of our Home Essentials social tariff with prices frozen this year
-- Consumer churn and complaints remain low with high levels of service
-- BT Sport remains home of UEFA club competitions, including the UEFA Champions League, until 2027
-- The CMA(1) approved the BT Group plc agreement with Warner Bros. Discovery, Inc. to form a 50:50 sports broadcasting joint venture
-- Contingency plans in place to minimise disruption and keep customers connected during CWU(2) strike action
Revenue and EBITDA growth, no change to full year outlook:
-- Revenue GBP5.1bn, up 1% due to improved pricing and trading in Consumer and Openreach, offset by the migration of a wholesale MVNO customer which concluded in FY22 and by continued legacy product declines and challenging market conditions impacting large corporate customers in Enterprise and Global.
-- Adjusted(3) EBITDA GBP1.9bn, up 2% primarily due to flow through from revenue and continued strong cost control
-- Reported profit before tax GBP0.5bn, down 10% due to increased depreciation offsetting EBITDA growth
-- Reported capital expenditure down 17% to GBP1.3bn, due to prior year investment in spectrum; capital expenditure excluding spectrum payments up 24% to GBP1.3bn, primarily due to increased investments on FTTP build and provision, and cost inflation
-- Normalised free cash flow(3) GBP(0.2)bn, down GBP162m primarily reflecting increased cash capital expenditure
-- Net financial debt (which excludes lease liabilities) was GBP13.2bn and net debt(3) was GBP18.9bn at 30 June 2022, both GBP0.9bn higher than at 31 March 2022 driven by pensions contributions and lower cash flows
-- No change to FY23 outlook: Revenue growth, at least GBP7.9bn EBITDA, around GBP4.8bn capital expenditure and between GBP1.3bn-GBP1.5bn normalised free cash flow
Three months to 30 June 2022 2021 Change ----------------------------- -------------------------------- Reported measures GBPm GBPm % Revenue 5,130 5,071 1 Profit before tax 482 536 (10) Profit after tax 422 2 n/m Capital expenditure 1,251 1,507 (17) ------------------------------ ----------------------------- -------------------------------- ------- Adjusted measures Adjusted(3) Revenue 5,133 5,070 1 Adjusted(3) EBITDA 1,903 1,866 2 Capital expenditure excluding spectrum 1,251 1,011 24 Normalised free cash flow(3) (205) (43) (377) Net debt(3,4) 18,891 18,566 GBP325m ------------------------------ ----------------------------- -------------------------------- -------
n/m = not meaningful
(1) Competition and Markets Authority
(2) Communications Workers Union
(3) See Glossary on page 3
(4) Net debt was GBP18,009m at 31 March 2022
Overview of the three months to 30 June 2022
Customer-facing unit updates
Adjusted(1) revenue Adjusted(1) EBITDA ----------------------- First quarter to 30 June 2022 2021 Change 2022 2021 Change GBPm GBPm % GBPm GBPm% ------------------ ------ ------ ------- ------ ------ ----- Consumer 2,502 2,382 5 625 523 20 Enterprise 1,200 1,287 (7) 315 429 (27) Global 774 785 (1) 96 102 (6) Openreach 1,417 1,347 5 851 773 10 Other 7 8 (13) 16 39 (59) Intra-group items (767) (739) (4) - -- ------------------ ------ ------ ------- ------ ------ ----- Total 5,133 5,070 1 1,903 1,8662 ------------------ ------ ------ ------- ------ ------ -----
Consumer: Strong financial performance and FTTP growth; churn remains near record lows
-- Revenue growth with improved fixed and mobile service revenues, now returning close to levels in the quarter before the start of the pandemic; this was helped by the annual contractual price rise in April and
strong Sport revenues including the Fury-Whyte event
-- EBITDA increased with revenue growth, tight cost management and lower indirect mobile commissions
-- Churn remains near record lows with continued low complaints to Ofcom and high levels of service
-- Highest ever quarterly growth in FTTP base with increase of 118k, 5G ready base now at 7.7m
-- The CMA approved the BT Group plc agreement with Warner Bros. Discovery, Inc. to form a 50:50 sports broadcasting joint venture
Enterprise: Challenging market conditions continue in large corporates offsetting growth in other segments
-- Revenue decrease primarily due to challenging market conditions in large corporates, ongoing legacy product declines and the migration of a wholesale MVNO customer which concluded in FY22
-- EBITDA decrease as a result of reduction in revenue, with the mix of revenue driving a further downside; Q1 FY22 also saw an asset disposal along with strong performance in ESN
-- SoHo and SME segments saw revenue and EBITDA growth
-- Retail order intake was GBP2.6bn on a 12-month rolling basis, down 8% with growth in new business offset by decline in contract re-signs; wholesale order intake was GBP1.0bn, up 8%
-- Concluded an agreement to extend the existing MVNO agreement with Telecom Plus (UW), and Sellafield Ltd has awarded a major new contract to BT for managed network services
Global: Challenging market conditions and impact of prior year divestments partly offset by strong cost transformation
-- Revenue decline due to impact of prior year divestments and challenging market conditions partly offset by GBP18m foreign exchange movement; revenue excluding divestments, one-offs and foreign exchange was down 1%
-- EBITDA decline reflected lower revenues, the impact of divestments and inflationary pressures offset by lower operating costs from ongoing modernisation, cost control and one-offs; EBITDA excluding divestments,
one-offs and foreign exchange was down 8%
-- Order intake was GBP3.7bn on a 12-month rolling basis, up 6% with our growth product portfolio
representing over half of total orders won in the quarter
-- Announced a strategic alliance with MTN to enhance communications services in Africa, in which cloud-based security and consultancy, managed connectivity and voice services will be delivered seamlessly as part of MTN's Enterprise portfolio. We also launched Connect Cloud Edge in partnership with Equinix, a next-generation cloud connectivity solution designed to accelerate our customers' digital transformation
Openreach: Revenue and EBITDA growth; FTTP build accelerating
-- Revenue growth driven by price increases and increased sales in fibre-enabled products and Ethernet, partially offset by decline in physical lines and decrease in chargeable repairs due to lower repair volumes;
in FY22 price increases started in Q2
-- EBITDA growth from revenue flow through and lower operating costs driven by lower repair and efficiency programmes, partially offset by higher FTTP provisioning activity and pay inflation
-- Record FTTP build of 763k premises passed in the quarter at an average build rate of 59k per week, around a third of the way through our 25m build; we now have a footprint of over 8m including 2.5m in rural locations
-- Record growth in FTTP take up with base of c.2.1m, weekly net adds of 23k and a take up rate of 26%
-- Achieved all 30 of the Ofcom Quality of Service measures for Q1, with higher standards set for FY23;
delivered improved year on year performance for on time copper and FTTP provision of 94% -- Finalised our FTTP co-provisioning agreement with Sky in a long-term deal
(1) See Glossary on page 3. Commentary on revenue and EBITDA is based on adjusted measures.
Glossary
Adjusted 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. EBITDA Earnings before interest, tax, depreciation and amortisation. Adjusted EBITDA EBITDA before specific items, share of post tax profits/losses of associates and joint ventures and net non-interest related 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 and payment of lease liabilities, before pension deficit payments (including cash tax benefit), payments relating to spectrum, and specific items. For non-tax related items the adjustments are made on a pre-tax basis. It excludes cash flows that are determined at a corporate level independently of ongoing trading operations such as dividends, share buybacks, acquisitions and disposals, and repayment and raising of debt. 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. 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. 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. ------------------- --------------------------------------------------------------
Our commentary focuses on the trading results on an adjusted basis, which is a non-GAAP measure, being before specific items. The directors believe that presentation of the group's results in this way is relevant to an understanding of the group's financial performance as specific items are those that in management's judgement need to be disclosed by virtue of their size, nature or incidence. This is consistent with the way that financial performance is measured by management and reported to the Board and the Executive Committee and assists in providing a meaningful analysis of the trading results of the group. In determining whether an event or transaction is specific, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence. Reported revenue, reported operating costs, reported operating profit and reported profit before tax are the equivalent unadjusted or statutory measures.
Enquiries
Press office: Tom Engel Tel: 07947 711 959 Richard Farnsworth Tel: 07734 776 317 Investor relations: Mark Lidiard Tel: 0800 389 4909
We will hold a conference call for analysts and investors in London at 10am today and a simultaneous webcast will be available at www.bt.com/results .
We are scheduled to announce the half year results for FY23 on 3 November 2022.
Forward-looking statements - caution advised
Certain information included in this announcement is forward looking and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward looking statements. Forward looking statements cover all matters which are not historical facts and include, without limitation, projections relating to results of operations and financial conditions and the Company's plans and objectives for future operations. Forward looking statements can be identified by the use of forward looking terminology, including terms such as 'believes', 'estimates', 'anticipates', 'expects', 'forecasts', 'intends', 'plans', 'projects', 'goal', 'target', 'aim', 'may', 'will', 'would', 'could' or 'should' or, in each case, their negative or other variations or comparable terminology. Forward looking statements in this announcement are not guarantees of future performance. All forward looking statements in this announcement are based upon information known to the Company on the date of this announcement. Accordingly, no assurance can be given that any particular expectation will be met and readers are cautioned not to place undue reliance on forward looking statements, which speak only at their respective dates. Additionally, forward looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority), the Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. Nothing in this announcement shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.
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END
TSTUBUWRUBUBUAR
(END) Dow Jones Newswires
July 28, 2022 02:00 ET (06:00 GMT)
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