Publications

Format: Jul 2019
sort descending Sector(s) Date
BT FY 2007/08 Q1 results: more clarity required on 21CN

Growth in revenue and EBITDA was adequate but a nasty surge in capex hit cash flow

Telecoms, Fixed Line 31 July 2007
BT FY 2007/2008 Q2 results: reasonable overall EBITDA performance but concerns on 21CN remain

Overall growth in revenue and EBITDA remained adequate, in spite of a poor quarter at BT Wholesale

Telecoms, Fixed Line 13 November 2007
BT FY 2008-09 Q1 results: wholesale hit compounded by weak performance at Global Services

BT’s Q1 results were weak, with declining like-for-like revenue and EBITDA, although cash flow grew strongly thanks to a lull in capex

Telecoms, Fixed Line 2 August 2008
BT FY 2008-09 Q2 results: resilience reduced by cost control issues at Global Services

As announced in the October trading update, BT’s Q2 results were hit by poor cost control at Global Services. Performance elsewhere was reasonable but was shored up at group level by a spike in contribution from non-core business

Telecoms, Fixed Line 17 November 2008
BT FY 2008-09 Q3 results: another mighty wave is looming

As announced in the January trading update, BT’s Q3 results were hit by poor cost control at Global Services and the identification of some ‘toxic’ contracts. Performance elsewhere continued to be reasonable but helped by a spike at Openreach and non-core business

With a further ‘one-off’ charge against GS EBITDA in Q4 a virtual certainty, we continue to expect problems at Global Services to combine with recessionary pressures and stalling broadband growth to constrain performance well into 2010

A large pension deficit at the actuarial valuation in May looks inevitable. The Digital Britain initiative could pave the way for legitimate government and regulatory support

Telecoms, Fixed Line 17 February 2009
BT FY 2008-09 Q4 results: clearing the decks

BT’s Q4 results contained a bombshell £1.3 billion write-down at Global Services to correct previous under-reporting of costs on two contracts, believed to be with the NHS and Reuters. Underlying EBITDA at Global Services also dropped sharply for the second quarter running

Annual pension contributions are to increase sharply, as expected, albeit to a level sustainable by the business. Performance at other divisions continues to be reasonable, given the economic environment

The company’s plans to cut costs have some credibility, but are expensive and will take time to implement. There is little prospect of meaningful recovery in cash flow until 2010

Telecoms, Fixed Line, Non-UK Telecoms 16 May 2009
BT FY 2009-10 Q1 results: what goes down

BT’s Q1 results provided welcome respite from a string of bad news, and some evidence of management’s ability to cut costs, but were helped by a temporary sharp reduction in capex and a VAT repayment. It remains early days

The ‘21st century’ upgrade to the core network now appears to be largely complete and delivering cost savings, but a separate voice network will continue to run over the access infrastructure

The company’s project to deploy more fibre beyond the local exchange, whilst a useful defensive move, looks unlikely to have a major impact on shareholder value

Telecoms, Fixed Line 1 August 2009
BT FY 2009-10 Q2 results: more progress on cost reduction

BT’s Q2 results, and improved guidance for the year to March 2010 provided further encouraging evidence of the new management team’s ability to take cost out of the business

However, the group is in a phase of revenue decline, primarily due to recession, but also strong competition

We continue to view limited deployment of next generation access as a worthwhile defensive move, but remain sceptical regarding the potential for uplift to shareholder value

Telecoms, Fixed Line 16 November 2009
BT FY 2009/10 Q3 results: recovery continuing, but longer term outlook uncertain

BT’s Q3 results and improved guidance for the year to March 2010 showed the current turnaround is well on track. But revenue continued to decline and improvements were concentrated at Global Services, the results for which were flattered by the dire prior year comparable

The UK business’s long term prospects also depend on successful deployment of next generation access, but this is over two years away

The results were overshadowed by the Pensions Regulator initially expressing ‘substantial concern’ over some features of the pension deficit valuation and recovery plan that the company has agreed with the trustees. Clarity on this is also some way off

Telecoms, Fixed Line 15 February 2010
BT Global Services

Global Services is the new name for BT's Ignite division. The structure of this important part of BT's business is complex and extremely difficult to understand. BT itself promotes the division as its 'hidden jewel', even though its financial performance in recent years has been little short of catastrophic. Investors rightly remain sceptical.

  • Yahoo
Telecoms 22 June 2003
BT Global Services: Playing a bad hand as well as it can

BTGS’s strategic plan seems like a sensible move in a very challenging market but it heralds its transition to a new operating model where its competitive advantage is largely eroded, its addressable market squeezed and it is arguably sub-scale

Although hybrid infrastructure and revenues from transition to cloud-based IT will provide something of a cushion, guidance and consensus forecasts are too optimistic in our view – cost-cutting plans are therefore likely deficient

Longer term, with IT services increasingly easy for corporates to manage themselves, diminished appetite for hybrid networks and global giants such as Amazon, Microsoft and Google squeezing out the middle-man, the space that BTGS occupies is likely to be considerably smaller

  • BT
Media, Telecoms 19 February 2019
BT management changes: exit Ben Verwaayen, enter Ian Livingston

BT announced on 8th April that Ian Livingston, currently CEO of BT Retail, will replace Ben Verwaayen as group CEO on 1st June. The Managing Director of BT Retail’s Consumer division, Gavin Patterson, will replace Ian Livingston at the helm of BT Retail. We expect John Petter to take Gavin’s place at the Consumer division

Telecoms 8 April 2008
BT Mobile goes fourth

BT announced this week its fourth launch of consumer mobile, following three failures since it split from O2 in 2001

The product is SIM-only, low-end priced and lacks any ‘convergent’ features as yet, but is well structured to target those likely to take a BT mobile service in our view

While its ambitions may be modest, take-up may well be higher than its over-ambitious over-complicated predecessors, as well as giving BT experience in cross-selling mobile prior to its EE acquisition

Mobile, Telecoms 26 March 2015
BT new Consumer strategy: Converging, but in a good way

BT has emphasised ‘convergence’ in its new Consumer strategy, but it has avoided most of the usual fixed-mobile convergence mistakes, with separate brands, minimal discounting and only slightly flawed converged products

The general strategy is to improve customer service to improve market share trends (particularly in broadband), enable premium products/positioning, and allow for cross-selling of a strong set of converged (in a broader sense) products, which is very sensible in our view

It does require extra spending in the short-term to improve customer service and the perception thereof (particularly in broadband) before premium positioning and cross-selling can be effective, therefore improved trends at the bottom line may take some time to come through

 

  • EE
  • BT
Fixed Line, Media, Mobile, Telecoms, UK Media 23 May 2018
BT Next Generation Access: a one billion pound toe in the water

BT’s announcement of a project to extend fibre beyond the exchange for some existing homes as well as newly built ones is good PR, a useful regulatory gambit, and offers the prospect of regaining some initiative from unbundlers and Virgin Media at the wholesale and retail levels respectively

  • Virgin Media
Telecoms, Fixed Line 14 July 2008
BT pre-quarterly results trading update: cost control issues at Global Services

On 31st October BT announced that Q2 EBITDA and EPS will be slightly below expectations as a result of a sharp deterioration in performance at Global Services (GS) and that GS CEO Francois Barrault has been replaced by erstwhile Group Finance Director Hanif Lalani

Fixed Line, Telecoms 31 October 2008
BT Q1 2010/11 results: strong cost control, but impact of government spending review remains uncertain

BT continues to improve its performance through cost reduction, with Global Services continuing to lead the way

Although a strike appears to have been averted, the next few quarters will be tougher due to increased EBITDA ‘re-investment’

Management is sticking to guidance which is, like the government, conservative in nature. Nonetheless, in our view, the forthcoming government spending review could still prove challenging

Telecoms, Fixed Line 2 August 2010
BT Q1 2011/12 results: marking time

BT reported another quarter of strong growth in broadband volume, helped by high competitor churn and accelerating take up of the Infinity high speed broadband service

But broadband volume growth did not feed through to financial performance at BT Retail, Global Services remained stuck in low gear and BT Wholesale performance weakened further

The company should make its guidance for the year to March, but evidence that it will do more than the minimum remains elusive

Fixed Line, Telecoms 2 August 2011
BT Q1 2013/14 results: Performance and prospects strong, BT Sport mainly defensive so far

BT’s underlying revenue growth of -1% in the June quarter was a slight dip from the March quarter, but remains very impressive compared to historic trends and international peers

BT Sport gained over 500k sign-ups, a pretty respectable figure in context, but so far it is looking mostly defensive, with any impact on broadband trends in the quarter indiscernible

Regulated cuts to copper pricing look like they will drop out completely from 2014/15, and BT’s DSL competitors are starting to push fibre more aggressively, both of which will give BT a very solid boost from 2014

Fixed Line, Telecoms 30 July 2013
BT Q1 2014/15 results: Solid Q1, but battles to come

BT had a solid Q1, with Group revenue growth still positive but slightly slowed by weakness in managed services and Global Services, and EBITDA flat in the last quarter before BT Sport costs fully annualise out

The consumer side had strong revenue growth, with accelerating volume growth and solid ARPU, although net subscriber additions were relatively subdued in a quarter that was seasonally quiet

The next quarter will likely be a noisier one, with promotions ramping up as the new football season launches, and both BT and Sky positioning themselves ahead of the next Premier League auction

Fixed Line, Telecoms 4 August 2014

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