BT Group (BT.A)

 

LSE:BT.A: 1st Quarter Results

BT Group

28 Jul 2017 07:00:08

BT Group PLC

RNS Number : 3997M
BT Group PLC
28 July 2017
 

BT Group plc                                                                                   

Results for the first quarter to 30 June 2017

28 July 2017

BT Group plc (BT.L) today announced its results for the first quarter to 30 June 2017.

 

Key developments for the quarter

Strategic:

·     Consultation launched by Openreach on building the investment case for a large-scale FTTP network

·     Consumer and EE divisions will be brought together to drive converged products and accelerate transformation

·     Forthcoming spectrum auction will allow BT to bid for high frequency spectrum facilitating upgrades to 5G technology

·     Continued improvement in customer experience metrics, Group Customer Perception and Right First Time

·     BT won exclusive live rights for European elite rugby cup competitions for 2018/19 - 2021/22

Operational:

·     Restructuring programme on track.  Plans announced to streamline our Italian business

·     Mobile postpaid net subscriber additions of 210,000, with churn remaining low at 1.1%

·     Openreach fibre connections remain high at 437,000, with fibre broadband now passing 26.8m UK households

·     Retail broadband net additions represent 53% market share, with fibre net additions of 170,000

·     Consumer revenue generating units per customer increased 4% to 2.00. Monthly mobile ARPU was £20.4, up 9%

Financial:

·     Settlement of warranty claims with Deutsche Telekom and Orange under EE acquisition agreement, arising from the previously reported issues in Italy, with specific item charge of £225m

·     Reported revenue up 1% and underlying1 revenue up 0.2% driven by our consumer facing businesses

·     Adjusted1 EBITDA decreased 2% due to increased pension costs, business rates, sport programme rights and our investment in customer experience

·     Net cash inflow from operating activities of £1,315m down £19m, and normalised free cash flow1 of £556m up £108m due to working capital phasing

·     Outlook maintained with share buyback of £200m in the quarter

 

Gavin Patterson, Chief Executive, commenting on the results, said

"BT has delivered an encouraging performance in the first quarter of the year. We've made good progress in our key areas of strategic focus: deliver great customer experience, invest for growth, and transform our costs. In particular, I'd highlight the growth achieved by our consumer facing businesses, helped by mobile.

 

"BT, with Openreach, is well placed to support the roll out of FTTP in the UK, and we're consulting with Ofcom, Government and other communications providers to build the investment case to achieve this outcome.

 

"Our new Consumer business will operate our three distinct brands; BT, EE and Plusnet; to leverage our position as the largest and only fully converged player in the market, spanning fixed and mobile networks, consumer products and services as well as content.

 

"We will continue to simplify and streamline the business and rationalise our costs as demonstrated by our ongoing performance transformation programme. Our businesses are leaders in their core segments and as we drive the business forward I am confident in the outlook for our Company."

 

 

 

 

First quarter to 30 June 2017

 

 

 

 

£m

Change

Reported measures

 

 

 

 

 

Revenue

 

 

 

5,837

1%

Profit before tax

 

 

 

418

(42)%

Basic earnings per share

 

 

 

2.9p

(51)%

Net cash inflow from operating activities

 

 

 

1,315

£(19)m

 

 

 

 

 

Adjusted measures

 

 

 

 

Change in underlying1 revenue excluding transit

 

 

 

0.2%

Adjusted1 EBITDA

 

 

 

1,785

(2)%

Change in underlying1 EBITDA

 

 

 

 

(2.5)%

Adjusted1 profit before tax

 

 

 

791

(1)%

Adjusted1 basic earnings per share

 

 

 

6.3p

(5)%

Normalised free cash flow1

 

 

556

£108m

Net debt1

 

 

 

8,810

£(762)m2

             

1 See Glossary on page 2
2 Revised, see note 1 to the condensed consolidated financial statements

This announcement contains inside information.
The person responsible for making this announcement is Dan Fitz, BT's Company Secretary.
 

Group results for the first quarter to 30 June 2017

 

 

First quarter to 30 June

 

 

 

 

2017

2016

Change

 

 

 

 

£m

£m

Revenue

 

 

 

 

 

 

- reported        

 

 

 

5,837

5,775

1

- adjusted1

 

 

 

5,849

5,775

1

- change in underlying1 revenue excluding transit

 

 

 

 

 

        0.2

EBITDA

 

 

 

 

 

 

- reported

 

 

 

1,467

1,785

(18)

- adjusted1

 

 

 

1,785

1,818

(2)

- change in underlying1 EBITDA

 

 

 

 

 

Operating profit

 

 

 

 

 

 

- reported

 

 

 

602

930

(35)

- adjusted1

 

 

 

920

963

(4)

Profit before tax

 

 

 

 

 

 

- reported

 

 

 

418

717

(42)

- adjusted1

 

 

 

791

802

(1)

Basic earnings per share

 

 

 

 

 

 

- reported

 

 

 

2.9p

5.9p

(51)

- adjusted1

 

 

 

6.3p

6.6p

(5)

Capital expenditure

 

 

 

835

777

Normalised free cash flow1

 

 

 

556

448

Net debt1

 

 

 

8,810

9,5722

£(762)m

Line of business results

 

Adjusted1 revenue

Adjusted1 EBITDA

Normalised free cash flow1

First quarter to 30 June

2017

2016

Change

2017

2016

Change

2017

2016

Change

 

£m

£m

%

£m

£m

%

£m

£m

%

Consumer

1,255

1,175

7

233

239

(3)

255

298

(14)

EE

1,291

1,243

4

335

281

19

166

187

(11)

Business and Public Sector

1,128

1,169

(4)

336

357

(6)

209

252

(17)

Global Services

1,244

1,250

-

73

119

(39)

(178)

(283)

37

Wholesale and Ventures

492

518

(5)

174

199

(13)

100

134

(25)

Openreach

1,267

1,252

1

614

632

(3)

303

235

29

Other

4

3

33

20

(9)

n/m

(299)

(375)

20

Intra-group items

(832)

(835)

-

-

-

-

-

-

-

Total

5,849

5,775

1

1,785

1,818

(2)

556

448

24

1  See Glossary

2 Revised, see note 1 to the condensed consolidated financial statements

n/m = not meaningful

 

Glossary of alternative performance measures

 

Adjusted

Before specific items

Free cash flow

Cash generated from operations (after capital expenditure) excluding pension deficit payments and after interest, tax and non-current asset investments

Net debt

Loans and other borrowings (both current and non-current), less current asset investments and cash and cash equivalents. Currency denominated balances within net debt are translated to Sterling at swapped rates where hedged

Normalised free cash flow

Free cash flow before specific items and the cash tax benefit of pension deficit payments

Specific items

 

Items that in management's judgement need to be disclosed separately by virtue of their size, nature or incidence. Further information is provided in note 1 on page 21

Underlying

Excludes specific items, foreign exchange movements and the effect of acquisitions and disposals. Further information is provided in note 2 on page 21

 

Reconciliations to the most directly comparable IFRS measures are in Additional Information on page 21.  Our commentary focuses on the trading results on an adjusted basis. Unless otherwise stated, revenue, operating costs, earnings before interest, tax, depreciation and amortisation (EBITDA), operating profit, profit before tax, net finance expense, earnings per share (EPS) and normalised free cash flow are measured before specific items.  Further information is provided in note 1 on page 21.

 

 

Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/3997M_-2017-7-28.pdf

 

 

 

 

 


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