TMCnet News

BT Maintains Full-Year Outlook As First Quarter Profit Up
[July 31, 2014]

BT Maintains Full-Year Outlook As First Quarter Profit Up


(Alliance News Via Acquire Media NewsEdge) LONDON (Alliance News) - BT Group PLC Thursday maintained its outlook for the full-year, as it saw pretax profit rise in its first quarter to the end of June on lower costs, despite seeing a decline in revenue.



The telecommunications company posted a pretax profit of GBP546 million, up from GBP449 million, despite seeing revenue decline to GBP4.35 billion from GBP4.45 billion, as operating costs lowered and it posted fewer exceptional charges.

Revenue was hit by GBP71 million from the strength of sterling, and a GBP46 million reduction in transit revenue.


Revenues in the company's Consumer division rose 10% to GBP1.05 billion from GBP950 million, driven by growth in broadband and TV revenue, boosted by its new BT Sport service. Average revenue per user rose 8%. Fibre continued to grow strongly, as the company added 226,000 customers, taking its customer base to over 2.3 million.

BT has begun to exchange legacy set-top boxes during the quarter, and as a result removed 35,000 inactive customers from its TV base. Removing these, it added 40,000 TV customers in the quarter.

Revenues fell 6% in the company's Global Services division, mostly hit by the strength of sterling and lower transit revenue. Additionally, public sector revenue declined due to lower levels of spending, although this was partly offset by higher revenues in Asia Pacific, Latin America, Turkey, the Middle East and Africa.

BT Business revenues were down 3%, as call and line volumes continued to decline, and customers shifted to newer, voice-over-internet services. Additionally, IT services revenue was down due to lower hardware sales, it said.

The company launched its BT One Phone mobile offering for businesses earlier in the month; its re-entry into the mobile market after an over ten-year absence. Although it is still early days, Chief Executive Gavin Patterson said on a call with journalists that the product had seen a lot of interest, including from FTSE-listed companies.

Wholesale revenues were down 18%, hit by a decline in managed solutions revenue, which suffered against a particularly strong performance in the previous year and an ongoing hit from the termination of its contract with the Post Office. Additionally, traditional calls, lines, and circuits revenue dropped 23%, due to lower fixed termination rates following telecommunications regulator Ofcom's narrowband market review.

Openreach revenue was broadly flat, anchored by regulatory price changes which offset growth in fibre broadband revenue; BT expects this impact to be higher in the second quarter as Ofcom's fixed access market review controls come into effect.

"We are building on solid foundations and I am confident we will deliver on our strategy," said Patterson in a statement.

Shares in BT Group were trading up 1.3% at 392.85 pence Thursday morning.

Copyright 2014 Alliance News Limited. All Rights Reserved.

[ Back To TMCnet.com's Homepage ]