31st Jan 2014 14:05
LONDON (Alliance News) - BT Group PLC Friday raised its full-year expectations for earnings before interest, tax, depreciation and amortisation, as revenue and pretax profit rose in its third quarter, boosted by uptake of its BT Sport service and fibre broadband services.
The FTSE 100 telecommunications company, which is expanding its offering to move towards becoming more of a triple-play service, now expects full-year EBITDA to meet the upper end of the GBP6.0 billion to GBP6.1 billion range.
BT saw revenue rise 2% to GBP4.60 billion in the quarter ended December 31, 2013, up from GBP4.38 billion in the previous year. BT said growth in its Consumer business had been boosted by growth in its BT Sport service.
Third-quarter pretax profit rose to GBP617 million, up 6% from GBP583 million in the previous year.
EBITDA was flat at GBP1.54 billion for the quarter, as cost savings offset the company's investment in its new BT Sport service. This brings BT's EBITDA for the first nine months of the year to GBP4.41 billion.
The company said that it had had another "record quarter" of fibre broadband take-up, with more than 18 million premises with access to its fibre. BT expects this number to grow as it progresses with the UK governments Broadband Delivery UK project, which aims to bring high-speed broadband available to rural communities.
BT said it saw 228,000 fibre net adds in the quarter, with 150,000 broadband net adds, which included existing customers upgrading their service.
The BT Sport customer base rose 500,000 in the quarter to 2.5 million, up from the 2 million reported at its interim results. The company said that it had attracted particularly strong audiences during December, and expressed confidence that its recently won rights to the UEFA Champions League and UEFA Europa League would further strengthen the appeal of its sports service.
The company saw its Global Services revenues rise 3% to GBP1.80 billion, up from GBP1.75 billion in the previous year, boosted by some contract milestones during the period.
However, in its BT Wholesale division, revenues declined 9% in the period to GBP589 million from GBP645 million.
This decline was mostly due to the UK Post Office dropping BT as its network services provider in 2012. However, on a call with press Friday, Chief Executive Gavin Patterson noted that there would be some impact in the fourth quarter as a result of Ofcom's recent Fixed Narrowband Market Review.
In September, the UK telecoms regulator imposed charge controls on BT as a result of the review into competition in the landline market .
Since the launch of its BT Sport service, a growing rivalry between BT and British Sky Broadcasting Group PLC has come into focus.
BSkyB Thursday raised its dividend and reaffirmed that it was on track for the full year, as it saw revenue rise in the half year ended December 31, 2013.
However, BSkyB's pretax profit continued to be hit by a step-up in Premier League football broadcasting licensing costs and increased investment into its connected services business.
BT launched BT Sport after it won rights to show some English Premier League matches. BT subsequently won exclusive rights to show Champions League and Europa Cup football matches in the UK for three seasons for EUR1.08 billion in total, starting from the 2015/16 season.
In the press call Friday Patterson noted that focusing on BT Sport on a standalone basis would be inaccurate, as the service compliments and effects its other services, such as broadband. Patterson noted that it would have benefits in reducing customer cancellations over the year.
Shares in BT were trading up 2.3% at 379.53 pence Friday afternoon, the top gainer in the FTSE 100.
Shares in BSkyB were trading down 1.8% at 862.30 pence Friday afternoon, having been a leading FTSE 100 gainer Thursday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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