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BT ‘accelerates transformation’

November 4, 2021

By Colin Mann

BT has reported H1 revenue at £10.3 billion (€12.1bn), down 3 per cent, driven by revenue decline in Enterprise and Global. Consumer revenue was flat, partially offset by growth in Openreach.

The telco’s Chief Executive, Philip Jansen, suggested the results demonstrate an acceleration of pace in the transformation of BT.

“We are creating a better BT for our customers, the country and our shareholders. We’re going further and faster on the UK’s next generation connectivity; we’re modernising BT and bringing down costs; and we’re reinstating the dividend today, as planned,” he stated.

Jansen continued: “After a record six months, Openreach has now rolled out full fibre broadband to almost 6 million premises and continues to lower its build cost. Its three largest customers are signed up to the new pricing offer as we see rapid adoption of what will be the UK’s first nationwide full fibre network spanning 25 million premises by 2026. Meanwhile, our 5G network now covers over 40 per cent of the UK’s population and we have over 5.2 million 5G ready customers. Together, our networks provide our customers with an unrivalled level of connectivity.”

“While we are serving our customers better than ever, BT is also changing rapidly internally. We have hit our £1 billion cost savings target 18 months early, which allows us to bring forward our FY25 target for £2 billion of savings to FY24. This is all part of creating a leaner BT with simplified processes and improved customer experiences.”

“BT is on track and with results in-line with our expectations, we are today confirming our financial outlook for FY22 and FY23. Looking further out, as we pass the peak of our fibre build and move towards an all-fibre, all-IP network, we expect a reduction in capex of at least £1 billion and lower operating costs of £500 million. From these two factors alone, by the end of the decade we expect an expansion of at least £1.5 billion in normalised free cash flow compared to FY22, and that’s before any benefits from increased revenue and further transformation efficiencies. Our progressive dividend policy will be underpinned by these increased cash flows as we move to sustainable growth going forward.”

According to Dan Ridsdale, MD of TMT & Platform at investment research and consultancy firm Edison Group, the results reflect the company’s good progress on a number of levels. “Following the recent announcement of the Group achieving its £1 billion cost saving target 18 months early, the company has also brought forward its FY25 cost saving target for £2 billion of savings to FY24. Significantly, the Group now also expects to deliver an expansion of £1.5 billion in normalised free cash flow compared to FY22 by the end of the decade and has today announced an interim dividend of 2.31p per share.

“Operationally, BT delivered a strong operational performance during the period with the ongoing rollout of the ‘Fibre First’ FTTP build programme which reached record levels in the second quarter building at an average run-rate of 47.3k premises passed per week. Openreach also delivered the strongest H1 ever in terms of repairs on time for 87.1 per cent as the rollout has delivered success. BT has also continued its growth during the period with the recently announced agreement with OneWeb for Low Earth Satellite Orbit delivering satellite network and connectivity services as part of the Group’s continued drive to deliver digital solutions anywhere in the UK by 2028. This strong operational performance leaves BT well placed to continue striving towards its target of its 4G network covering 90% of the UK by the mid-2020s with the 5G network rollout continuing its success and covering more than half the population by 2023. In September the Group also brought forward its net zero targets from 2045 to 2030 for operational emissions and 2040 for supply chain and customer emissions.

“Following Patrick Drahi’s stake build, the early disclosure of these new cost saving and cash flow targets, coupled with the recent appointment of advisory firm, Robey Warshaw, BT has bolstered its defence against a takeover at the wrong level.,” he concludes.


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