BT cuts revenue guidance
November 7, 2024
BT has reported H1 2024 revenue of £10.1 billion (€12.1bn), down 3 per cent mainly attributed to challenging conditions in Business, principally driven by non-UK trading in its Global and Portfolio channels. In the rest of the Group, lower CPI benefit and continued competitive markets in Consumer were broadly offset by growth in Openreach due to the benefit of price increases, Ethernet base growth and improving FTTP volume and mix.
The telco reported record FTTP build rate of 2.1 million in the half with FTTP footprint passing 16 million premises, around half of the UK, in October. BT has increased its FY25 build target to 4.2 million within existing capex envelope driven by build cost efficiencies, putting them on track to reach 25 million by December 2026.
There was strong customer demand for Openreach FTTP with record net adds of 446k in Q2; total premises connected 5.5 million with an increased and market-leading take up rate of 35 per cent. Openreach broadband ARPU in H1 grew year-on-year by 6 per cent to £16, ahead of the CPI price increases, driven by a greater FTTP take-up and speed mix; Openreach broadband line losses in H1 were 377k, a 2 per cent decline in the broadband base. BT said it continues to see moderately higher competitor losses with a weaker overall broadband and new homes market
The retail FTTP base grew by 35 per cent year-on-year to 3 million of which Consumer 2.8 million and Business 0.2 million; the 5G base was at 12.5 million, up 25 per cent year-on-year.
Consumer postpaid mobile base was at 13.9million; Consumer broadband base was marginally lower at 8.2 million.
FY25 revenue guidance has bee revised to down 1-2 per cent primarily reflecting weaker non-UK trading including reduced low-margin kit sales, along with a softer environment in the Corporate and Public Sector.
Allison Kirkby, Chief Executive, commenting on the results, said: “We have accelerated the modernisation of BT Group in the first half of the year. We’ve ramped up our full fibre build and connections, seen further improvements in customer satisfaction, and our cost transformation contributed to growth in EBITDA and normalised free cash flow despite revenue declines driven by our non-UK operations and a competitive retail environment.”
“Our nationwide full fibre rollout has set new records, now reaching more than 16 million premises, and we have further extended our industry-leading take-up rate to 35 per cent. Our cost to build continues to reduce, enabling us to increase this year’s build target to 4.2 million with no additional capex spend. We also expanded our 5G network to cover 80 per cent of the UK population, more than any other operator. These investments in the UK’s next generation networks are enabling much better experiences, reflected in our improved net promoter scores.”
“We are confirming our EBITDA, capex and cash flow guidance for FY25, albeit on lower revenue guidance. We remain firmly on track to meet our long-term cost savings and cash flow targets, and today announce an interim dividend of 2.40pps. The accelerated modernisation of our operations, combined with a focus on connecting the UK, puts us in a strong position to generate significant value for all our stakeholders,” concluded Kirkby.