Bt Share Discussion Threads

[essentialinvestor] 11/5/2018 18:56

Careful, I spoke with someone yesterday who holds a senior position in BT,
who made the exactly same point-a lack of unified/common vision.

That starts with the CEO.

[andyberg] 11/5/2018 18:49

7 layers of management between a C3 engineer and Gavin P....Go figure where the moneys being wasted!

[kazoom] 11/5/2018 18:33

careful 11 May '18 - 17:30 - 28126 of 28128

About 6 months ago, RMG were in a similar position to their sister company BT.
Restructure, pensions negotiations, pay deals, changes in working practices. All negotiated with the same union the CWU.

RMG were at about 360p. It all turned out well and today they are trading about 70% up at 630p.

Many other differences of course but let us hope for a decent outcome here as well.

Interesting observation careful, but important to remember that RMG have been privatised for nearly 5 years (and are still pretty much a domestic monopoly in their traditional market) whereas BT was privatised nearly 35 years ago. RMG have just made some of the types of changes BT made decades ago, so not really imho a good comparison.

It's something of a fail by Gavin imho :
Either
> These are logical efficiencies that have de facto been there all the way through his tour at the top, in which case he has clearly failed to control the business of which he is CEO.
or
> There are areas of the business that now clearly need to be closed down to focus smaller resources on the truly value creating parts. In which case he has really failed to communicate that message.

My understanding (probably not very informed these days ) is that there are inefficiencies caused by empire building amongst the Senior / Higher Middle managers, pedalling their own agendas through building teams of enthusiastic yes (wo)men.

BT has spent over the years a serious amount of "consultancy" spend on the likes of Deloitte & such looking into the markets in which they operate when BT itself had far superior expertise on these matters but I do not believe they spent much on whether the senior management structures actually worked.

That is not an uncommon trait amongst big businesses to be fair, but it seems to me that (despite remaining a well positioned and potentially exciting business) BT has been mired over the last few years by an ineffective and destructive senior management culture.

Nevertheless I have remained bullish (and wrong so far) that the strength of the business would overcome the weakness of the management - I think that case still holds.

There is as understand it though NO common vision across the business as to what BT (as a whole) is or what it does - that's clearly a failure that has to be put at the feet of Gavin P. I think he has a really limited time now (and I may be being generous) to create that unified view and deliver on it.

He's a clever and I'm told nice guy, but he is rapidly running out of time to convince anyone he is (now) capable of making the changes required.

[smurfy2001] 11/5/2018 18:14

I know people that cancel their BT fibre weeks before their prices rises after their 12/18 month discounts. Why don't BT stop the discounts and just offer cheaper prices that you remain on after the initial contract period? Wouldn't there be far less customer churn?

[toon1966] 11/5/2018 18:10

schofip - no chance, there's no way a private equity firm would be willing to work in such a regulated market and would they be willing to shell out billions to upgrade the network?

[pacemaker1000] 11/5/2018 18:07

Careful. I’d love to agree but the RMG recovery started when the union agreement was made. We moved in the opposition direction after the same deal

[schofip] 11/5/2018 18:04

This company needs to be bought up by a private equity firm, turned around, broken up and sold on. I suspect 13000 redundancies would be the thin end of very large wedge. I imagine a couple of Indian or Chinese investors may fit the bill or Blackrock, KKR etc.

I don't think the current management have the knowledge or backbone to turn this company around. They are out of their depth.

[hamhamham1] 11/5/2018 18:01

Strategic asset? Maybe?
But foreign takeovers of companies like Vocalink (where UK banks swap money) or Worldpay (where 40% of UK internet payments go though) have all happened. Never say never IMHO.

[essentialinvestor] 11/5/2018 17:53

A bid would not be allowed, BT is viewed as a UK strategic asset.

You can make a case for buying, but a bid is not part of that imv.

[hamhamham1] 11/5/2018 17:40

IMO Deutsche Telekom will buy BT, dont they own 12% or 14% already through the EE sale?

[careful] 11/5/2018 17:30

About 6 months ago, RMG were in a similar position to their sister company BT.
Restructure, pensions negotiations, pay deals, changes in working practices. All negotiated with the same union the CWU.

RMG were at about 360p. It all turned out well and today they are trading about 70% up at 630p.

Many other differences of course but let us hope for a decent outcome here as well.

[pacemaker1000] 11/5/2018 17:21

To me, not cutting the divi is BT telling ofcom and hmc that it isn’t prepared to make shareholders pay for Britain’s broadband investment as they’ve already suffered enough loss thanks to their interference.
Making staff redundant instead reinforces this!
Everything now out in the open and ball back in OFCOMs court. If they are serious about faster BB then they had better move fast before somebody buys up this bargain company

[toon1966] 11/5/2018 17:12

Pace - I suspect these will be Voluntary Redundancies which are far more generous that CR.

[pacemaker1000] 11/5/2018 17:10

The 800m seems ott to me. So many guys queuing up to leave could be a lot less. This figure seems to assume compulsory redundancies with two years pay max thanks to the recent pension screw over deal.

[careful] 11/5/2018 16:58

the new chairman has a great track record.
My guess is that he is behind this restructure.

In the past, retirement and redundancy packages at BT have been too generous for the company to afford.
Hope this time they are fair but realistic.

[tradejunkie2] 11/5/2018 16:52

Montyhedge

Stick that golf club where the sun doesn't shine.

LOL

[toon1966] 11/5/2018 16:36

Montyhedge - talking of last chance saloons what happened to the US Cavalry this afternoon? Did they get stuck at the 'Little Big Horn'?

[mornington crescent] 11/5/2018 16:12

Its a chimera

he has been on the board for 10 years and ceo for 5
and only now decides to make these cuts

he is in trouble and needed to do something - anything
but it wont work
the job is too big for him

bye bye Gavin

[toon1966] 11/5/2018 16:10

I agree that the restructuring will come at a cost - £800 million, that's a lot. Restructurings take time to plan and then implement and also accept the 'why now' and 'should have been sooner' argument. I also believe there are a number of other issues which have got the City nervous, debt pile, Global services, dividends etc. I hope GP can turn this around, but believe he has entered the 'last chance saloon'.

[diku] 11/5/2018 16:03

Because it will come at a heavy cost....so why were these 13000 employed in the first place?...somebody asleep at the wheel...

[toon1966] 11/5/2018 16:01

So why are the City unhappy with the scale of the redundancies?

[essentialinvestor] 11/5/2018 15:48

DMF, if you are about, do you have any thoughts on BT here?.

From previous posts you were looking for some very sharp sell off
to mark capitulation. When you first mentioned near £2, or under,
I thought .. no way. Well got that one wrong!. Not holding atm.

[hamhamham1] 11/5/2018 15:46

I think the city is just unhappy at the scale of the redundancies, they didn't expect it, even if it is the right thing to do (which it is IMO), it was still unexpected and IMO they like to prostrate the share on the floor for a few weeks as punishment, then they will acknowledge it makes sense and will be all on board. It's just a theory I have.

[essentialinvestor] 11/5/2018 15:35

Monty, my WG doing nicely today, IC had a Sell on Wood following the FY.


I know some won't agree, however for me an approx 40% dividend cut would
have been better. Payout then nicely covered and look to grow the dividend over
the next few years, if a recovery in trading progresses.

AV. did something similar a few year back, and their share price responded very nicely
since.