BT's Broadband Services Power Earnings -- Update
February 01 2016 - 4:57AM
Dow Jones News
(Updates, adds detail.)
By Simon Zekaria
LONDON--BT Group PLC (BT.A.LN) on Monday said it revamped its
corporate structure after jumping back into consumer mobile
services and hailed its prospects, as the company posted a rise in
quarterly earnings powered by take-up of fiber-optic broadband
services.
The 169-year-old telecom company recorded net profit of 796
million pounds ($1.14 billion) in the third quarter to Dec. 31, up
from GBP558 million in the same period a year earlier.
Pretax profit before exceptional items was GBP928 million, up
14% year-on-year. On a reported basis, it rose 24%.
Revenue, also before exceptional items, increased 3% to GBP4.59
billion. Also adjusted but excluding currency effects,
acquisitions, disposals and transit sales, revenue increased 4.7%,
which the company said is its best result for more than seven
years.
"This is a strong set of results with good numbers across the
board," said Chief Executive Gavin Patterson.
The company reiterated its profit outlook for the 2016 fiscal
year. It sees adjusted revenue excluding transit growing between 1%
and 2%, even as it said the booking of historical pricing revenue
based on call charges will hurt its top line fourth-quarter
performance.
BT is in a fierce battle for subscribers against telecoms and
media services rivals such as Vodafone Group PLC (VOD.LN), Liberty
Global PLC (LBTYA) and Sky PLC (SKY.LN), as its builds out its
connected Internet, telecoms and pay-television businesses. It has
plowed billions of dollars into sports TV channels, including
English Premier League soccer rights, and acquired mobile operator
EE for $19 billion last year to bolster its position.
It has also countered industry criticism that its reach is too
powerful through deployment of network services through its
infrastructure division Openreach, which lays down most of the
country's telecom lines. The network allows rivals to reach
customers through wholesale charges.
Mr. Patterson Monday said Openreach should be functionally
separated, but stay part of BT.
"We have a model that works," he said, adding that complete
separation would create "instability" in the market.
BT's consumer business posted revenue growth of 11%. BT said its
super-fast fiber broadband network is available to over 24 million
households and businesses and the quarter recorded 494,000 fiber
broadband customers, up 32%. It also added 97,000 TV customers.
From April, the company is changing its corporate structure into
six divisions to accommodate its new mobile business EE and it has
also created a new division that will focus on U.K. businesses and
the public sector.
It said it has more than 300,000 mobile subscribers. Mr.
Patterson told reporters BT will retain both BT and EE brands for
its mobile services.
At 0856 GMT, shares were up 2.5% at 497 pence, valuing the
company at GBP48.3 billion.
Citi analyst Simon Weeden said the company had posted strong
figures, ahead of the broker's forecasts. He added that the company
is making a "sensible" reorganization of the business to
accommodate mobile services.
Write to Simon Zekaria at simon.zekaria@wsj.com
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(END) Dow Jones Newswires
February 01, 2016 04:42 ET (09:42 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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