TIDMBT.A
RNS Number : 4552F
BT Group PLC
28 July 2016
28 July 2016
BT GROUP PLC
RESULTS FOR THE FIRST QUARTER TO 30 JUNE 2016
BT Group plc (BT.L) today announced its results for the first
quarter to 30 June 2016.
First quarter to
30 June 2016
GBPm Change(1)
------ -----------
Revenue(2) 5,775 35%
Change in underlying revenue(3) excluding
transit on a pro forma basis 0.4%
EBITDA(2) 1,818 25%
Profit before tax - adjusted(2) 802 16%
- reported 717 13%
Earnings per share - adjusted(2) 6.6p (1)%
- reported 5.9p (3)%
Normalised free 448 GBP342m
cash flow(4)
Net debt 9,579 GBP3,760m
Gavin Patterson, Chief Executive, commenting on the results,
said:
"We've made a good start to the year, with growth in revenue and
strong cash flow. We're on track to deliver our full year
outlook.
"Our integration of EE is progressing well, alongside our
business reorganisation that took effect on 1 April. EE performed
strongly, both financially and commercially, and our customers are
seeing the initial benefits of our acquisition with BT Sport now
available to EE pay monthly customers. We remain focused on
improving customer experience and 100% of EE pay monthly calls are
now handled in UK and Ireland contact centres. We've reduced
engineer missed appointments by more than a third since last
quarter and Openreach is again ahead on all 60 minimum service
levels set by Ofcom.
"Fibre broadband is available to well over 25m premises and
take-up remains strong. At a retail level, we performed well
achieving a 79% share of broadband net adds in the quarter. We were
pleased to renew our FA Cup rights during the quarter and we look
forward to showing more games from the Premier League at a much
better time slot, starting in two weeks. Our customers can also
look forward to all the exclusive live action from the UEFA
Champions League and UEFA Europa League once again this year.
"Our investment plans remain central to our future and so we
will be rolling out further fibre in the coming months, as well as
4G through the Emergency Services Network contract. Our aim is to
make these services as universally available as we can, whilst also
deploying a new generation of ultrafast broadband. Such investment
requires regulatory clarity, particularly in these uncertain
times.
"Having listened to Ofcom and industry, we have set out our
proposals for greater independence and transparency for Openreach.
Our proposals can form the basis for a fair, proportionate and
sustainable regulatory settlement and we believe they can also
enable Ofcom to bring its Digital Communications Review to a
speedier conclusion. We will continue to engage with Ofcom over the
coming months."
Key points for the quarter:
-- Growth in underlying revenue(3) excluding transit on a pro forma basis up 0.4%
-- Underlying EBITDA(3) on a pro forma basis down 2% reflecting
our launch of BT Mobile handsets
-- 79% share of broadband net additions
-- Mobile pay monthly net additions of 244,000, with record low EE churn
-- Significant governance changes planned to further increase
the independence and transparency of Openreach
(1) The results for the period include EE which we acquired on
29 January 2016. Unless referred to as underlying on a pro forma
basis, comparatives do not include EE
(2) Before specific items, which are defined on page 3
(3) Excludes specific items, foreign exchange movements and
disposals and is calculated as though EE had been part of the group
from 1 April 2015. This differs from
how we usually adjust for acquisitions as explained on page
3
(4) Before specific items, pension deficit payments and the cash
tax benefit of pension deficit payments
GROUP RESULTS FOR THE FIRST QUARTER TO 30 JUNE 2016
First quarter to 30 June
-------------------------------------------------------------------------- ---------------------------------------
2016 2015 Change(1)
GBPm GBPm %
-------------------------------------------------------------------------- ---------- ---------- ---------------
Revenue
- adjusted(2) 5,775 4,278 35
- reported 5,775 4,360 32
- change in underlying revenue(3) excluding transit on a pro forma basis 0.4
-------------------------------------------------------------------------- ---------- ---------- ---------------
EBITDA
- adjusted(2) 1,818 1,449 25
- reported 1,785 1,442 24
-------------------------------------------------------------------------- ---------------
Operating profit
- adjusted(2) 963 821 17
- reported 930 814 14
-------------------------------------------------------------------------- ---------- ---------- ---------------
Profit before tax
- adjusted(2) 802 694 16
- reported 717 632 13
-------------------------------------------------------------------------- ---------- ---------- ---------------
Earnings per share
- adjusted(2) 6.6p 6.7p (1)
- reported 5.9p 6.1p (3)
-------------------------------------------------------------------------- ---------- ---------- ---------------
Capital expenditure 777 658 18
-------------------------------------------------------------------------- ---------- ---------- ---------------
Normalised free cash flow(4) 448 106 GBP342m
Net debt 9,579 5,819 GBP3,760m
-------------------------------------------------------------------------- ---------- ---------- ---------------
Line of business results(2)
Revenue EBITDA Free cash flow(4)
----------------------- ---------------------- ---------------------- -------------------------
First quarter to 2016 2015(5) Change 2016 2015(5) Change 2016 2015(5) Change
30 June
GBPm GBPm % GBPm GBPm % GBPm GBPm %
----------------------- ----- ------- ------ ----- ------- ------ ------- -------- ------
Consumer 1,175 1,076 9 239 258 (7) 298 215 39
EE 1,243 0 n/m 281 0 n/m 187 0 n/m
Business and Public
Sector 1,169 990 18 357 297 20 252 111 127
Global Services 1,250 1,196 5 119 93 28 (283) (279) 1
Wholesale and Ventures 518 578 (10) 199 185 8 134 111 21
Openreach 1,252 1,249 0 632 638 (1) 235 269 (13)
Other 3 3 0 (9) (22) 59 (375) (321) (17)
Intra-group items (835) (814) 3 0 0 n/m 0 0 n/m
----------------------- ----- ------- ------ ----- ------- ------ ------- -------- ------
Total 5,775 4,278 35 1,818 1,449 25 448 106 323
----------------------- ----- ------- ------ ----- ------- ------ ------- -------- ------
(1) The results for the period include EE which we acquired on
29 January 2016. Unless referred to as underlying on a pro forma
basis, comparatives do not include EE
(2) Before specific items, which are defined on page 3
(3) Excludes specific items, foreign exchange movements and
disposals and is calculated as though EE had been part of the group
from 1 April 2015. This differs from
how we usually adjust for acquisitions as explained on page
3
(4) Before specific items, pension deficit payments and the cash
tax benefit of pension deficit payments
(5) Certain line of business results have been restated. See
Note 1 to the condensed consolidated financial statements
n/m = not meaningful
Notes:
1. Our commentary focuses on the trading results on an adjusted
basis, which is a non-GAAP measure, being before specific items.
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. This is consistent with the way that financial performance
is measured by management and reported to the Board and the
Operating Committee and assists in providing a meaningful analysis
of the trading results of the group. The directors believe that
presentation of the group's results in this way is relevant to the
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. 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. Specific items may not be
comparable with similarly titled measures used by other companies.
Reported revenue, reported operating costs, reported operating
profit, reported profit before tax, reported net finance expense
and reported EPS are the equivalent unadjusted or statutory
measures. Reconciliations of reported to adjusted revenue,
operating costs and operating profit are set out in the Group
income statement. Reconciliations of underlying revenue and
operating costs, EBITDA, pro forma EBITDA, net debt and free cash
flow to the nearest measures prepared in accordance with IFRS are
provided in the Additional information.
2. Trends in underlying revenue, trends in underlying operating
costs, and underlying EBITDA are non-GAAP measures which seek to
reflect the underlying performance of the group that will
contribute to long-term sustainable growth and as such exclude the
impact of acquisitions and disposals, foreign exchange movements
and any specific items. We focus on the trends in underlying
revenue and underlying operating costs excluding transit as transit
traffic is low-margin and is affected by reductions in mobile
termination rates. Given the significance of the EE acquisition to
the group, in 2016/17 we are calculating underlying revenue,
underlying operating costs and underlying EBITDA on a pro forma
basis (see note 3), as though EE had been part of the group from 1
April 2015. This is different from how we usually adjust for
acquisitions, and is the basis for our 2016/17 outlook.
3. We have prepared and published pro forma historical financial
information for the eight quarters ended 31 March 2016 for the
group and by line of business under the new organisational
structure, to illustrate the results as though EE had been part of
the group from 1 April 2014. The pro forma historical financial
information shows EE's historical results adjusted to reflect BT's
accounting policies. In the consolidated group total, we've
eliminated historical transactions between BT and EE as though they
had been intercompany transactions. We have not made any
adjustments to reflect the allocation of the purchase price for EE.
All deal and acquisition-related costs have been treated as
specific items and therefore don't impact the pro forma.
Enquiries
Press office:
Ross Cook Tel: 020 7356 5369
Investor relations:
Carl Murdock-Smith Tel: 020 7356 4909
We will hold a conference call for analysts and investors at
8.30am today and a simultaneous webcast will be available at
www.bt.com/results
We are scheduled to announce the second quarter and half year
results for 2016/17 on 27 October 2016.
About BT
BT's purpose is to use the power of communications to make a
better world. It is one of the world's leading providers of
communications services and solutions, serving customers in 180
countries. Its principal activities include the provision of
networked IT services globally; local, national and international
telecommunications services to its customers for use at home, at
work and on the move; broadband, TV and internet products and
services; and converged fixed-mobile products and services. BT
consists of six customer-facing lines of business: Consumer, EE,
Business and Public Sector, Global Services, Wholesale and
Ventures, and Openreach.
For the year ended 31 March 2016, BT Group's reported revenue
was GBP19,042m with reported profit before taxation of
GBP3,029m.
British Telecommunications plc (BT) is a wholly-owned subsidiary
of BT Group plc and encompasses virtually all businesses and assets
of the BT Group. BT Group plc is listed on stock exchanges in
London and New York.
For more information, visit www.btplc.com
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