TIDMBT.A
RNS Number : 7069R
BT Group PLC
31 October 2019
Financial results
Results for the half year to 30 September 2019
BT Group plc
31 October 2019
BT Group plc (BT.L) today announced its results for the half
year to 30 September 2019.
Key strategic developments:
-- Launched a host of new products for consumer and business
segments, including the new Halo converged product plans and BT
Mobile 5G
-- Introduced a range of new service initiatives including
bringing the BT brand to the high street in over 600 EE/BT
dual-branded stores, and to answer 100% of customer calls in the UK
& Ireland from January 2020
-- Continued to make progress on the BT modernisation agenda,
including delivering over GBP1.1bn transformation benefits,
announcing the first locations in our Better Workplace Programme,
and disposal of BT Fleet Solutions
-- Outlined our Skills for Tomorrow programme to provide digital
skills training for 10m UK children, families and businesses
Operational:
-- 5G network live in over 20 cities and large towns; 5G
smartphone plans now available on both EE and BT brands
-- Openreach announced the launch of new FTTP 1Gbps and 550Mbps
products. FTTP rollout at c.23k premises passed per week; 4.2m
ultrafast (FTTP and Gfast) premises passed to date; currently
announced plans to build FTTP in 103 locations
-- Consumer fixed ARPC GBP38.5, broadly flat year on year;
postpaid mobile ARPC GBP20.8, down 5.5% year on year due to impact
of regulation and continued trend towards SIM-only; RGUs per
address up to 2.38
-- Postpaid mobile churn remains low at 1.2% in Q2 despite
impact of auto switching; fixed churn at 1.3% in Q2 down from 1.6%
in prior year
Financial:
-- Reported revenue GBP11,467m, down 1%(1) mainly reflecting the
impact of regulation, declines in legacy products, and
strategically reducing low margin business
-- Reported profit before tax GBP1,333m, broadly flat year on
year; adjusted(2) EBITDA GBP3,923m, down 3%(1) due to lower
revenues, increased spectrum fees, content costs and investment to
improve competitive positioning partly offset by cost savings from
transformation programmes
-- Net cash inflow from operating activities of GBP2,173m;
normalised free cash flow(2) of GBP604m, down 38% due to increased
capital expenditure, higher interest and tax payments, partially
offset by one-off cash flows
-- Capital expenditure GBP1,882m. Up GBP225m excluding BDUK
grant funding deferral, driven by increased network investment
-- Net debt(2) increased primarily due to implementation of IFRS
16, GBP6.1bn, and net business cash outflows, GBP1.2bn
-- Interim dividend of 4.62p per share; 30% of last year's
full-year dividend of 15.4p per share
-- Overall financial outlook maintained
Philip Jansen, Chief Executive, commenting on the results, said
"BT delivered results in line with our expectations for the second
quarter and first half of the year, and we remain on track to
meet our outlook for the full year.
"We've invested to strengthen our competitive position. We've
accelerated our 5G and FTTP rollouts, introduced an enhanced range
of product and service initiatives for both consumer and business
segments, and announced price and technology commitments to deliver
fair, predictable and competitive pricing for customers.
"Openreach is significantly accelerating its pace of FTTP build
and is now passing a home or business every 26 seconds. Openreach
announced a further 29 locations in its build plan to reach 4m
premises by March 2021, and we continue to make positive progress
with Government and Ofcom on the enablers to stimulate further
investment in full fibre.
"We continue to make progress on the BT modernisation agenda,
delivering over GBP1.1bn in annualised cost savings, and announcing
locations in our Better Workplace Programme."
==========
Half year to 30 September 2019 2018 2018 Change(1)
(IFRS 16) (IAS 17) (IFRS 16
pro forma(2)
)
============================== ===== =========== ========== =============== ==========
GBPm GBPm GBPm %
============================== ===== =========== ========== =============== ==========
Reported measures
Revenue 11,467 11,588 (1)
Profit before tax 1,333 1,340 n/m
Profit after tax 1,068 1,052 n/m
Basic earnings per share 10.8p 10.6p 2
Net cash inflow from operating
activities 2,173 754 188
Interim dividend 4.62p 4.62p -
Capital expenditure 1,882 1,833 3
Adjusted measures
Adjusted(2) revenue 11,413 11,624 11,624 (2)
Adjusted(2) EBITDA 3,923 3,675 4,038 (3)
Normalised free cash
flow(2) 604 974 974 (38)
Net debt(2) 18,347 11,895 n/m
===================================== =========== ========== =============== ==========
Customer-facing unit results for the half year to 30 September
2019
Adjusted(1) revenue Adjusted(1) EBITDA Normalised free cash
flow(1)
================================= ================================
Half year 2019 2018(2) Change 2019 2018(2) Change 2019 2018(2) Change
to
30 September (IFRS (IFRS (IFRS (IFRS (IFRS (IFRS
16) 16 16) 16 16) 16
pro forma(1) pro forma(1) pro forma(1)
) ) )
GBPm GBPm % GBPm GBPm % GBPm GBPm %
================ ======== ============== ======= ======= ============== ======= ======= ============== =======
Consumer 5,194 5,224 (1) 1,180 1,237 (5) 534 617 (13)
Enterprise 3,055 3,221 (5) 968 1,003 (3) 630 564 12
Global 2,196 2,332 (6) 304 255 19 40 (74) 154
Openreach 2,536 2,548 - 1,417 1,478 (4) 197 448 (56)
Other - 2 n/m 54 65 (17) (797) (581) (37)
Intra-group
items (1,568) (1,703) 8 - - - - - -
================ ======== ============== ======= ======= ============== ======= ======= ============== =======
Total 11,413 11,624 (2) 3,923 4,038 (3) 604 974 (38)
================ ======== ============== ======= ======= ============== ======= ======= ============== =======
Second quarter
to 30 September
================ ======== ============== ======= ======= ============== ======= ======= ============== =======
Consumer 2,644 2,654 - 592 617 (4)
Enterprise 1,539 1,633 (6) 497 517 (4)
Global 1,111 1,185 (6) 164 136 21
Openreach 1,268 1,293 (2) 700 761 (8)
Other (1) 1 n/m 12 27 (56)
Intra-group
items (781) (858) 9 - - -
================ ======== ============== ======= ======= ============== ======= ======= ============== =======
Total 5,780 5,908 (2) 1,965 2,058 (5) 281 467 (40)
================ ======== ============== ======= ======= ============== ======= ======= ============== =======
(1) See Glossary below
(2) Segmental results as reported in the Q2 2018/19 results
release have been restated to reflect i) the bringing together of
our Business and Public Sector and Wholesale and Ventures
customer-facing units into a single customer-facing unit,
Enterprise, on 1 October 2018; the transfer of our Northern Ireland
Networks business from Enterprise to Openreach and reclassification
of certain internal revenues generated by our Ventures businesses
as segmental revenue rather than internal recovery of cost; (see
press release on 17 January 2019) and ii) the change in the
allocation of group overhead costs and the transfer of the
Emergency Services Network contract from Consumer to Enterprise
(see press release on 3 July 2019)
n/m = not meaningful
Glossary of alternative performance measures
Adjusted Before specific items
EBITDA Earnings before interest, tax, depreciation and amortisation
Adjusted EBITDA EBITDA before specific items, share of post tax profits/losses
of associates and joint ventures and net non-interest
related finance expense
Free cash flow Net cash inflow from operating activities after net
capital expenditure
Capital expenditure Additions to property, plant and equipment and intangible
assets in the period
Normalised free Free cash flow after net interest paid and payment
cash flow of lease liabilities, before pension deficit payments
(including the cash tax benefit of pension deficit
payments) and specific items
Net debt Loans and other borrowings and lease liabilities
(both current and non-current), less current asset
investments and cash and cash equivalents. Currency
denominated balances within net debt are translated
into sterling at swapped rates where hedged. Fair
value adjustments and accrued interest applied to
reflect the effective interest method are removed
IFRS 16 pro forma On 1 April 2019, BT adopted IFRS 16 Leases, which
replaced IAS 17 Leases. To aid comparability, pro
forma financial information for 2018/19 has been
presented to reflect how the results would have looked
like if the accounting standard had been adopted
last year. See page 9 for more details.
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 6 on page
25
==================== ===============================================================
We assess the performance of the group using a variety of
alternative performance measures. The rationale for using adjusted
measures is explained in note 1 on page 32. Results on an adjusted
basis are presented before specific items. Reconciliations from the
most directly comparable IFRS measures are in Additional
Information on pages 32 to 34.
Enquiries
Press office:
Tom Engel Tel: 020 7356 5369
Investor relations:
Mark Lidiard Tel: 020 7356 4909
We will hold a conference call for analysts and investors in
London at 9am today and a simultaneous webcast will be available at
www.bt.com/results
We are scheduled to announce the third quarter results for
2019/20 on 30 January 2020.
Click on, or paste the following link into your web browser, to
view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/7069R_1-2019-10-30.pdf
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END
IR WGGMCUUPBGBU
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