BT shares surged over 10 per cent to head the FTSE 100 leader board after unveiling underlying pre-tax profits of close on £1.5bn. This is after stripping out £449m of restructuring costs, but that’s still better than the average £1.38bn expected by analysts.
Underlying revenue is still falling, however, down 2 per cent to £20.9bn, but while genuine top-line growth is unlikely before 2012-13, the worst looks to be behind the business. In the fourth quarter cash profits rose 6 per cent in BT Retail and surged from £32m to £177m in Global Services. Free cashflow more than doubled to £1.93bn in the 12 months to March 2010, allowing the group to slash over £1bn off its debt pile to £9.3bn.
Over the next five years BT plans to spend an extra £1bn to extend its high-speed fibre network in order to connect two-thirds of UK households by 2015. In the current financial year the group will plough an extra £200m into TV and other consumer packages while there are also plans to expand its Global Service arm in Asia Pacific.
Analysts have yet to update forecasts but investors can expect upgrades to previous 2011 EPS consensus estimates of 16.6p.
BT (BT.A) | ||||
|---|---|---|---|---|
| ORD PRICE: | 133p | MARKET VALUE: | £10.3bn | |
| TOUCH: | 133-133.3p | 12-MONTH HIGH: | 151p | 84p |
| DIVIDEND YIELD: | 5.2% | PE RATIO: | 10 | |
| NET ASSET VALUE: | * | NET DEBT: | £9.3bn | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 19.5 | 2.04 | 18.4 | 11.9 |
| 2007 | 20.2 | 2.48 | 34.4 | 15.1 |
| 2008 | 20.7 | 1.98 | 21.5 | 15.8 |
| 2009** | 21.4 | -0.24 | -2.5 | 6.5 |
| 2010 | 20.9 | 1.01 | 13.3 | 6.9 |
| % change | -2 | - | - | +6 |
Ex-div:11 Aug Payment: 6 Sep *Negative shareholders funds **2009 figures restated | ||||
