BT's shares slipped on the back of these figures, despite having announced plans to raise the dividend by 10-15 per cent for the next three years and the commencement in 2013 of a £300m share buy-back programme. Something closer to a 20 per cent dividend hike had been expected. Still, the yield remains attractive and BT is delivering on its operational metrics - so investors should stay connected to BT.
The group has been especially busy bolstering its broadband offering and has made fibre optic broadband available to 10m homes - allowing BT to grab a 54 per cent share of all broadband net new additions in 2011. Combined with further traction in BT Vision - which grew subscriptions 23 per cent to 700,000 homes - and BT Retail's operating profit increased 6 per cent to £1.4bn. BT's global services business is improving, too, with order in-take there having risen 8 per cent in the final quarter to £2bn - despite an 8 per cent slide for the year as a whole. Ongoing cost-cutting has helped divisional operating losses to narrow to £85m, from £141m, and management expect solid earnings growth in 2013.
Broker Jefferies forecasts pre-tax profit for 2013 of £2.66bn, giving EPS of 26.3p (2012: £2.44bn/25.8p).
BT (BT.A) | ||||
|---|---|---|---|---|
| ORD PRICE: | 212p | MARKET VALUE: | £16.5bn | |
| TOUCH: | 212-213p | 12-MONTH HIGH: | 235p | LOW:158p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 17p* | NET DEBT: | £9.1bn | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 20.7 | 1.98 | 21.5 | 15.8 |
| 2008 | 21.4 | -0.24 | -2.50 | 6.50 |
| 2009 | 20.9 | 1.01 | 13.3 | 6.90 |
| 2010 | 20.1 | 1.72 | 19.4 | 7.40 |
| 2011 | 18.9 | 2.45 | 25.8 | 8.30 |
| % change | -6 | +42 | +33 | +12 |
Ex-div:08 Aug Payment:03 Sep *Includes intangible assets of £3.1bn or 40p per share | ||||
