BT's (BT.A) full-year performance was overshadowed by its broadband ambitions. The day before these figures appeared, it set out plans to offer its sports channels - including premier league football - for free to its broadband customers. That could cost £1bn in rights alone over the next three years, but it could also boost customer numbers.
Decent broadband progress is already apparent. It took a 51 per cent share of all DSL and fibre broadband customers that signed up last year - boosting customers by 7 per cent to 6.7m. That, along with a cost focus, is helping to offset the long-term decline in the fixed-line operations. BT Retail's revenue, for instance, fell 2 per cent year-on-year, but the unit's operating profit rose 9 per cent to £1.55bn. In fact, group operating costs fell 9 per cent to £12.5bn, significantly reflecting reduced working capital levels. BT is still generating plenty of cash, too - net free cash flow was flat at £2.3bn - which is supporting a £300m share buy-back scheme and funded a hefty dividend hike.
Management expects cash profit to decline slightly for 2013-14 to £6bn-£6.1bn - largely reflecting investment in the new BT Sport offering. Prior to these figures, JP Morgan was expecting adjusted EPS of 26.9p for end-March 2014 (from 26.6p in 2013).
BT GROUP (BT.A) | ||||
|---|---|---|---|---|
| ORD PRICE: | 306p | MARKET VALUE: | £24.1bn | |
| TOUCH: | 305.9-306p | 12-MONTH HIGH: | 311p | LOW: 197p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 220p* | NET DEBT: | 45% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 21.4 | -0.24 | -2.50 | 6.5 |
| 2010 | 20.9 | 1.01 | 13.3 | 6.9 |
| 2011 | 20.1 | 1.72 | 19.4 | 7.4 |
| 2012 | 18.9 | 2.45 | 25.8 | 8.3 |
| 2013 | 18.0 | 2.50 | 26.7 | 9.5 |
| % change | -5 | +2 | +3 | +14 |
Ex-div: 7 Aug Payment: 2 Sep *Includes intangible assets of £3.26bn, or 41p a share | ||||
