Should I buy BT shares?

BT Group goes from strength to strength, it seems. After a strong fourth quarter and decent full-year results, the telecoms giant has done it again. And with a "good start to the year" driven by further progress at both the consumer business and infrastructure division Openreach, there's reason to keep subscribing to the shares.

In a brief statement, BT said that despite a 2% dip in first-quarter revenue to £4.35 billion underlying pre-tax profit had risen by 7% to £638 million, giving underlying earnings per share of 6.5p. Once again, the company's high-speed fibre broadband and successful sports channels beefed up the consumer unit where cash profits rose 3% to £238 million. Openreach grew the same to £605 million. Only the wholesale division fell - down 20% - although this wasn't entirely unexpected.

"We have made a good start to the year," said chief executive Gavin Patterson. "We have delivered growth in underlying revenue excluding transit and in profit before tax, and free cash flow was strong."

Over three million have signed up to BT's broadband services, but its fibre broadband network now covers 20 million homes - two thirds of the UK - and rising. It's costing a lot, yes - BT has employed another 2,500 staff in recent months - but that investment is paying off.

BT has had great success both in broadband and TV where it has just signed former Manchester United and England star Paul Scholes in a four-year deal. And in recent months its share price has consistently found technical support at the 200-day moving average. No wonder, trading on just 13 times forward earnings, a discount to fierce rival BSkyB, the shares continue to look good value.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.