BT Group Discussion

Re: decreasing revenue

gingerneil — Fri, 11 May 2012 11:48:00 GMT

True - but there lies another regulatory battle with some of the other operators starting to complain to ofcom that they cant afford to pay the extra. Its about double the wholesale copper costs.
By gingerneil

Re: decreasing revenue

mistermr — Fri, 11 May 2012 10:16:00 GMT

Also Openreach revenues will grow as people switch from copper to GEA (fibre) - even with LLU operators, Openreach get more for a GEA circuit than they do for an LLU copper line. By mistermr

Re: decreasing revenue

gingerneil — Fri, 11 May 2012 10:12:00 GMT

"There is a lot of competition in the UK for the services which BT provides and the basic problem is they are falling behind year on year with their services and other companies are improving theirs."

But thats not the problem. Wholesale revenues are going down as mobile termination rates and other regulated areas see a drop in revenue. Services directly to consumers, such as broadband are increasing. We are getting more and more of the market share in these areas - but its just not quite enough to offset the decreases in Wholesale. Revenues in GS are also doing well, and will soon tip the balance with the Wholesale losses. Revenue falls are not due to consumers chosing other service providers.

By gingerneil

decreasing revenue

freddy low flyer 13 — Thu, 10 May 2012 17:04:00 GMT

There are a lot of comments about the reason for decreasing revenue and its been a failure of BT for a number of years now.

There are no excuses, it happens year after year.

There is a lot of competition in the UK for the services which BT provides and the basic problem is they are falling behind year on year with their services and other companies are improving theirs.

IMHO...BT is only at the price it is today because of its dividend yield and the possibility of further year on year increases...but the reality is its service to customers after a sustained effort to correct it is once again failing as in my case.

This will affect revenues and its ability to pay dividends in the long term as in the past...it will become apparent at some point and will hold the shares back until it can stop people migrating and expand...plus the affect of years of cutting the workforce appears negative to growth.

By freddy low flyer 13

Nomura

nk1999 — Thu, 10 May 2012 17:01:00 GMT

From HL:

"Nomura has maintained its buy recommendation and 295p target price for telecoms titan BT, saying that while fourth-quarter revenues were soft, earnings, free cash flow and guidance were strong.

The broker did note BT's decision not to rebase its dividend after announcing an 8.3p-a-share payout, up 12% on last year but below the high-end forecast of 11p. "There is a risk that investors feel short-changed from a low pay-out post the pension settlement and also that this undermines confidence in the pension settlement itself, but BT has polled key investors from whom the key demand has been affordability and growth - which should at least mark BT apart from other telecom peers," Nomura said.

As for the valuation, the broker highlights that the stock is 9% off its recent highs and trades at a slight discount to the sector. "

nk
By nk1999

Re: Dividend Speculation in Telegraph

lucky boy05 — Thu, 10 May 2012 16:34:00 GMT

Agree with gingerneil about divi
Clearly expecations were set higher by the press but what they did forget was that the pension rules have changed to include QE in their calculations which was not calculated in the triennial pension review. I do think divi payment would have been higher if not that change of calculation

Still maintain a buy on these shares. Hopefully this company can make profit through growth rather than cuts

Good luck all By lucky boy05

Motley Fool article

nk1999 — Thu, 10 May 2012 15:59:00 GMT

http://www.fool.co.uk/news/investing/company-comment/2012/05/10/bt-moves-into-bargain-territory.aspx?source=ufwflwlnk0000001

nk By nk1999

Re: Dividend Speculation in Telegraph

gingerneil — Thu, 10 May 2012 15:16:00 GMT

Any more on the divi would have triggered more pension payments. Slow and steady increase is good and responsible. It's a lot easier to add on small amounts than take away! By gingerneil

Re: Decreasing Revenue

gingerneil — Thu, 10 May 2012 15:13:00 GMT

This isn't about adopt in retail consumer revenues - indeed we are taking more and more market share. The drop is for 3 reason, in order of impact: 1. No growth predicted for this fy - against previous guidance, 2. Wholesale revenues dropping at the wrong end of expectations & 3. Slightly poor divi increase compared to some predictions. On the latter, those expectations were crazy IMHO. we have seen an increase at the top end of what could be done without triggering further pension deficit overpayments, and therefore in line with what could reasonably have been expected.

210p is ok - with the problems in Europe overshadowing the markets, the SP is about where you would expect with these results. Macro factors will hopefully change direction and bring us up a little heading into the summer.

By gingerneil

Decreasing Revenue

freddy low flyer 13 — Thu, 10 May 2012 12:54:00 GMT

BT has for a few years now had a decreasing revenue.

Being a loyal customer for approx 40 years i have sung their praises and even when other companies have approached me to migrate i have always argued BTs service was brilliant.

My bills over the years have gradually increased with small increments in what they provide..my bills have been incorrect now for 6 months, with no sign of them being corrected..the service has a lot to be desired, they say they will ring back it never happens, so i started cancelling firstly BT Vision..next to go is my phone and broadband.

I can now understand why the revenue is falling. By freddy low flyer 13

Re: Dividend Speculation in Telegraph

Cheapskater — Thu, 10 May 2012 12:15:00 GMT

The markets take on the results is quite negative. FTSE was a bit up earlier this morning but BT share price was down by more than the final divi at one point. We are not seeing any kind of upward spike at all. It's a negative spike that looks to be over now. My take on it is it's cautious and for the future. Probably good for long term investors but not is not the time to throw money into anything long.

Analysis: Profits are up 16% (about 340M) and other indicators for it are up, (EBITDA, etc) but revenues are down 4% (about 800M) That's at least the third straight year revenues have dropped. You can only only cut costs and make more profit for so long. To make more profit long term they need to be increasing revenue above the costs needed to generate it. I have a feeling they are well on course to do that with all the network investment and their free cash generation and with the 1.5bn overpayment into the pension fund, the fundamentals are excellent.

However, the problem that the market has with it is one of expectation. BT made a statement that the pension fund overpayment was to allow them to increase the dividend (timing was just due to taxation changes) they increasesd the annual divi by 12.4% and have now nailed their colours to the mast by stating 10-15% divi growth over the next 3 years. The expectation had been set for a larger dividend payment and the market has met 5.7p with disappointment. This is because of the size of the overpayment and the size of the annual savings going forward should allow for a significantly larger divident, both in the current paymout and going forward. For example, an extra penny on each divi would be about £90M to BT, including company dividend tax. That is barely a blip compared to unloading the extra £1.5B into the pension. That's about 16x what an extra 1p in the divi would have cost, which would have pleased the market and therefore the shareholders the board are ultimately accountable to. If they are generating that much free cash that they can make that sort of overpayment and they have also reduced their ongoing pension payments by £200M a year then BT should be easily able to have popped 1p on the divi and still increased it by 10-15% in years to come with out impacting business operations or increasing risk.

So the market is disappointed and now the share price reflects an annual divident of 8.3p this year and should rise to about 240p by next year for a 15% increase to 9.3p. Without any other major news though expect swings either side of that on the way to it. Basically, don't expect amazing growth in the SP. In the short term expect the whole market to drop by the time Greece default on their next payment next month if they don't sort their governmet out with one that meets the criteria for their bailout. I wouldn't be surprised to see the FTSE <5,100 by then. With Spain looming in the wings and France having changed their outlook. I have no prediction of how we will end up in 12 months but I do believe it will be an exceptionally bumpy ride.

I hope that doesn't sound too negative. It's a bit short term. If you want to lock money away for 5 years then you should make a packet here in growth (40%) and dividends (25%) but I think you can probably buy in cheaper in the next couple of months before the divi record date. Just my opinion, not advice. Good luck By Cheapskater

Re: Dividend Speculation in Telegraph

Lupo di mare — Thu, 10 May 2012 10:45:00 GMT

Here's the link to more detailed results:

http://www.btplc.com/News/ResultsPDF/q412release.pdf By Lupo di mare

Re: Dividend Speculation in Telegraph

enigma1 — Thu, 10 May 2012 10:32:00 GMT

do we have an xd date yet ?
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8th August, paid 3rd September. By enigma1

Re: Dividend Speculation in Telegraph

jaytee41 — Thu, 10 May 2012 10:18:00 GMT

do we have an xd date yet ? By jaytee41

Scouse Barnsey — Thu, 10 May 2012 08:32:00 GMT

this is a solid set of results. growth in divi 10-15% next few years, strong cash and profit up. how many companies are going that in this environment. safe mid term bet. By Scouse Barnsey