TIDMBT.A
RNS Number : 3014X
BT Group PLC
05 May 2016
5 May 2016
BT GROUP PLC
RESULTS FOR THE FOURTH QUARTER AND YEAR TO 31 MARCH 2016
BT Group plc (BT.L) today announced its results for the fourth
quarter and year to 31 March 2016.
Fourth quarter to Year to
31 March 2016 31 March 2016
(incl. EE from 29 (incl. EE from 29
Jan) Jan)
GBPm Change GBPm Change
------------- ----------------- ------------- -----------------
Revenue(1) 5,656 22% 18,909 6%
Change in underlying revenue(2)
excluding transit 1.3% 2.0%
EBITDA(1) 2,076 14% 6,580 5%
Profit before
tax - adjusted(1) 1,145 11% 3,473 9%
- reported 893 6% 3,029 15%
Earnings per
share - adjusted(1) 10.2p 2% 33.2p 5%
- reported 8.0p (5)% 29.9p 13%
Full year proposed dividend 14.0p 13%
Normalised free cash flow(3) 1,519 GBP252m 3,098 GBP268m
Net debt 9,845 GBP4,726m
Gavin Patterson, Chief Executive, commenting on the results,
said:
"This has been a landmark year for BT. We've completed our
acquisition of EE, the UK's best 4G mobile network provider, we've
passed more than 25m premises with fibre and we've also delivered a
strong financial performance. We've met our outlook with our main
revenue(4) measure up 2.0%, the best performance for more than
seven years. Our profit before tax(1) was up a healthy 9%.
"Customers want to be online wherever they are and we will be
there for them. Our multi-billion pound investment plans will see
both fibre and 4G reach 95% of the UK and we won't stop there. The
UK is a digital leader and our investment in ultrafast broadband
will help it stay ahead.
"The integration of EE is going well and we now see the
opportunity to deliver more synergies than we originally expected,
and at a lower cost. And we're reorganising our business to better
serve customers both in the UK and internationally.
"We've invested across the business and are seeing good results.
Our BT Sport audiences are up 45 per cent this year following the
launch of UEFA Champions League and UEFA Europa League content. BT
Mobile has done well since its launch, building a customer base of
over 400,000. And in the business market, we've seen very strong
demand for our cyber security expertise with our security business
growing by 24%.
"Customers are benefiting from our investments but we plan to do
more when it comes to service, to meet customers' rising
expectations. That's why Openreach is tackling missed appointments,
why BT Consumer will be upgrading service levels to next day repair
and why we've hired 900 engineers. We've also recruited more than
900 extra contact centre staff. This will enable us to return EE
and BT Consumer contact centre work to the UK.
"Our strong overall performance for the year is reflected in our
full year dividend, which is up 13%. Our results and the
investments we're making position us well to continue to grow in
the coming years. In light of our confidence we are setting out
financial and dividend guidance for the next two years."
(1) Before specific items. Includes EE from 29 January 2016
(2) Excludes specific items, foreign exchange movements and the
effect of acquisitions and disposals
(3) Before specific items, pension deficit payments and the cash
tax benefit of pension deficit payments
(4) Change in underlying revenue excluding transit
Key points for the fourth quarter:
-- Our acquisition of EE completed on 29 January 2016
-- Underlying revenue(1) excluding transit up 1.3%
-- Underlying operating costs(2) excluding transit up 2%
primarily reflecting our investment in BT Sport Europe
-- EBITDA(3) up 14% including GBP261m from EE
-- Openreach achieved 415,000 fibre broadband net additions with
other service providers connecting 48% of these
-- Combined BT and EE broadband(4) net additions market share of 81%
Key points for the year:
-- Underlying revenue(1) excluding transit up 2.0%, our best
performance for more than seven years
-- EBITDA(3) of GBP6,580m, up 5%, including GBP261m from EE
-- Earnings per share(3) up 5%
-- Normalised free cash flow(5) of GBP3,098m, up 9%, including GBP261m impact from EE
-- Proposed final dividend of 9.6p, up 13%, giving a full year dividend of 14.0p, also up 13%
-- BT Consumer TV customer base grew by 28% to 1.5m
-- Fibre broadband available to more than 25m premises
Performance against 2015/16 outlook:
In February we reaffirmed our EBITDA and free cash flow outlook
and clarified that we expected underlying revenue excluding transit
to grow by 1% to 2%. This outlook excluded the impact of acquiring
EE and we have set out below how we performed on this basis.
2015/16 2015/16
outlook performance
-------------------------------- -------------- -------------
Change in underlying revenue(1) Up 1% - 2% Up 2%
excluding transit(6)
EBITDA(3, 6) Modest growth Up 1%
Normalised free cash flow(5, c.GBP2.8bn GBP2,837m
6)
Dividend per share Up 10% - 15% Up 13%
Share buyback c.GBP300m GBP315m
-------------------------------- -------------- -------------
Outlook:
Our outlook for 2016/17 and 2017/18 is as follows:
2016/17 2017/18
-------------------------------- ------------- -------------
Change in underlying revenue(1) Growth Growth
excluding transit(7)
EBITDA(3) c.GBP7.9bn Growth
Normalised free cash flow(5) GBP3.1bn - >GBP3.6bn
GBP3.2bn
Dividend per share >=10% growth >=10% growth
Share buyback c.GBP200m
-------------------------------- ------------- -------------
Our 2016/17 outlook assumes a net investment of around GBP100m
against EBITDA and normalised free cash flow from launching handset
offerings to BT Mobile customers.
Also included in the above normalised free cash flow outlook, we
expect around GBP100m of EE integration capital expenditure in each
of 2016/17 and 2017/18. We also expect capital expenditure of up to
GBP300m in 2016/17 and around GBP100m in 2017/18 relating to the
Emergency Services Network contract won by EE in December 2015.
(1) Excludes specific items, foreign exchange movements and the
effect of acquisitions and disposals
(2) Excludes specific items, foreign exchange movements and the
effect of acquisitions and disposals and is before depreciation and
amortisation
(3) Before specific items
(4) DSL and fibre
(5) Before specific items, pension deficit payments and the cash
tax benefit of pension deficit payments
(6) Excludes the impact of EE
(7) Measured as though EE had been part of the group from 1
April 2015, see page 4
GROUP RESULTS FOR THE FOURTH QUARTER AND YEAR TO 31 MARCH
2016
Fourth quarter to 31 March Year to 31 March
------------------------------------------- ------------------------------------- -----------------------------
2016(1) 2015 Change 2016(1) 2015 Change
GBPm GBPm % GBPm GBPm %
------------------------------------------- -------------- --------- ---------- -------- ------- ----------
Revenue
- adjusted(2) 5,656 4,639 22 18,909 17,851 6
- reported 5,586 4,709 19 19,042 17,979 6
- underlying revenue(3) excluding transit 1.3 2.0
------------------------------------------- -------------- --------- ---------- -------- ------- ----------
EBITDA
- adjusted(2) 2,076 1,819 14 6,580 6,271 5
- reported 1,884 1,712 10 6,365 6,018 6
------------------------------------------- ---------- ----------
Operating profit
- adjusted(2) 1,289 1,169 10 3,950 3,733 6
- reported 1,097 1,062 3 3,735 3,480 7
------------------------------------------- -------------- --------- ---------- -------- ------- ----------
Profit before tax
- adjusted(2) 1,145 1,030 11 3,473 3,172 9
(MORE TO FOLLOW) Dow Jones Newswires
May 05, 2016 02:00 ET (06:00 GMT)
- reported 893 842 6 3,029 2,645 15
------------------------------------------- -------------- --------- ---------- -------- ------- ----------
Earnings per share
- adjusted(2) 10.2p 10.0p 2 33.2p 31.5p 5
- reported 8.0p 8.4p (5) 29.9p 26.5p 13
------------------------------------------- -------------- --------- ---------- -------- ------- ----------
Full year proposed dividend 14.0p 12.4p 13
------------------------------------------- -------------- --------- ---------- -------- ------- ----------
Capital expenditure 776 678 14 2,650 2,326 14
------------------------------------------- -------------- --------- ---------- -------- ------- ----------
Normalised free cash flow(4) 1,519 1,267 20 3,098 2,830 9
Net debt 9,845 5,119 GBP4,726m
------------------------------------------- -------------- --------- ---------- -------- ------- ----------
Line of business results(2)
Revenue EBITDA Free cash flow(4)
---------------------- ------------------------ ---------------------- -------------------------
Fourth quarter to 2016(1) 2015 Change 2016(1) 2015 Change 2016(1) 2015 Change
31 March
GBPm GBPm % GBPm GBPm % GBPm GBPm %
---------------------- ------- ------- ------ ------- ----- ------ --------- ----- -------
BT Global Services 1,753 1,789 (2) 366 347 5 545 599 (9)
BT Business 821 805 2 307 277 11 243 229 6
BT Consumer 1,192 1,100 8 311 317 (2) 150 207 (28)
EE 1,055 0 n/m 261 0 n/m 310 0 n/m
BT Wholesale 509 571 (11) 140 174 (20) 104 93 12
Openreach 1,290 1,266 2 700 698 0 401 394 2
Other and intra-group
items (964) (892) 8 (9) 6 (250) (234) (255) (8)
---------------------- ------- ------- ------ ------- ----- ------ --------- ----- -------
Total 5,656 4,639 22 2,076 1,819 14 1,519 1,267 20
---------------------- ------- ------- ------ ------- ----- ------ --------- ----- -------
Year to 31 March
BT Global Services 6,530 6,779 (4) 1,048 1,047 0 475 349 36
BT Business 3,130 3,145 0 1,076 1,041 3 819 874 (6)
BT Consumer 4,598 4,285 7 1,037 1,031 1 762 813 (6)
EE 1,055 0 n/m 261 0 n/m 310 0 n/m
BT Wholesale 2,086 2,157 (3) 542 561 (3) 404 278 45
Openreach 5,100 5,011 2 2,664 2,600 2 1,419 1,502 (6)
Other and intra-group
items (3,590) (3,526) 2 (48) (9) 433 (1,091) (986) 11
---------------------- ------- ------- ------ ------- ----- ------ --------- ----- -------
Total 18,909 17,851 6 6,580 6,271 5 3,098 2,830 9
---------------------- ------- ------- ------ ------- ----- ------ --------- ----- -------
(1) Includes EE from 29 January 2016
(2) Before specific items. Specific items are defined in Note 4
to the condensed consolidated financial statements
(3) Excludes specific items, foreign exchange movements and the
effect of acquisitions and disposals
(4) Before specific items, pension deficit payments and the cash
tax benefit of pension deficit payments. Line of business operating
cash flows exclude interest, tax and
integration capital expenditure which are classified within
Other
n/m = not meaningful
Notes:
1. Our commentary focuses on the trading results on an adjusted
basis, which is a non-GAAP measure, being before specific items.
Unless otherwise stated, revenue, operating costs, earnings before
interest, tax, depreciation and amortisation (EBITDA), operating
profit, profit before tax, net finance expense, earnings per share
(EPS) and normalised free cash flow are measured before specific
items. This is consistent with the way that financial performance
is measured by management and reported to the Board and the
Operating Committee and assists in providing a meaningful analysis
of the trading results of the group. The directors believe that
presentation of the group's results in this way is relevant to the
understanding of the group's financial performance as specific
items are those that in management's judgement need to be disclosed
by virtue of their size, nature or incidence. In determining
whether an event or transaction is specific, management considers
quantitative as well as qualitative factors such as the frequency
or predictability of occurrence. Specific items may not be
comparable with similarly titled measures used by other companies.
Reported revenue, reported operating costs, reported EBITDA,
reported operating profit, reported profit before tax, reported net
finance expense, reported EPS and reported free cash flow are the
equivalent unadjusted or statutory measures. Reconciliations of
reported to adjusted revenue, operating costs and operating profit
are set out in the Group income statement. Specific items are set
out in Note 4. Reconciliations of EBITDA, adjusted profit before
tax and adjusted EPS to the nearest measures prepared in accordance
with IFRS are provided in Notes 8, 9 and 10 respectively.
2. Trends in underlying revenue, trends in underlying operating
costs, and underlying EBITDA are non-GAAP measures which seek to
reflect the underlying performance of the group that will
contribute to long-term sustainable growth and as such exclude the
impact of acquisitions and disposals, foreign exchange movements
and any specific items. We focus on the trends in underlying
revenue and underlying operating costs excluding transit as transit
traffic is low-margin and is affected by reductions in mobile
termination rates. Given the significance of the EE acquisition to
the group, in 2016/17 we will calculate underlying revenue
excluding transit as though EE had been part of the group from 1
April 2015. This is different from how we usually adjust for
acquisitions, and is the basis for our 2016/17 outlook.
Enquiries
Press office:
Ross Cook Tel: 020 7356 5369
Investor relations:
Damien Maltarp Tel: 020 7356 4909
We will hold the fourth quarter and full year 2015/16 results
presentation for analysts and investors in London at 9.30am today
and a simultaneous webcast will be available at
www.bt.com/results
We expect to publish the BT Group plc Annual Report & Form
20-F 2016 on 19 May 2016. The Annual General Meeting of BT Group
plc will be held at The Motorpoint Arena, Mary Ann Street, Cardiff,
CF10 2EQ, on 13 July 2016 at 10:30am.
We expect to announce our results for the first quarter to 30
June 2016 on 28 July 2016.
About BT
BT's purpose is to use the power of communications to make a
better world. It is one of the world's leading providers of
communications services and solutions, serving customers in more
than 180 countries. Its principal activities include the provision
of networked IT services globally; local, national and
international telecommunications services to its customers for use
at home, at work and on the move; broadband, TV and internet
products and services; and converged fixed-mobile products and
services. As at 31 March 2016, BT consisted principally of six
customer-facing lines of business: BT Global Services, BT Business,
BT Consumer, EE, BT Wholesale and Openreach. With effect from 1
April 2016, the group has been reorganised and the customer-facing
lines of business are now: Global Services, Business and Public
Sector, Consumer, EE, Wholesale and Ventures, and Openreach.
British Telecommunications plc (BT) is a wholly-owned subsidiary
of BT Group plc and encompasses virtually all businesses and assets
of the BT Group. BT Group plc is listed on stock exchanges in
London and New York. For more information, visit www.btplc.com.
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