1st Feb 2016 11:15
LONDON (Alliance News) - BT Group PLC Monday reaffirmed its outlook for the full financial year in its current guise, as it reported a rise in pretax profit in its third quarter and year to date and outlined a new organisational structure following its acquisition of mobile network EE Ltd.
For the quarter to end-December the telecommunications and pay-TV company reported a pretax profit of GBP862 million, up from GBP694 million a year before, as revenue rose to GBP4.64 billion from GBP4.48 billion.
This takes BT's pretax profit for the first nine months of its financial year to GBP2.14 billion, up from GBP1.8 billion a year before, on revenue of GBP13.25 billion, up from GBP13.21 billion.
BT said that, following its acquisition of EE, it will have a new organisational structure with effect from April. Under the new structure, it will have six lines of business, comprising Consumer, EE, Business & Public Sector, Global Services, Wholesale & Ventures and Openreach.
The six businesses will be supported by its Technology, Service and Operations division headed by Howard Watson, in which there will be a new IT and Mobile business unit to be led by EE's Fotis Karonis.
As part of the changes the company said that parts of its BT Global Services business that focus on the UK corporate and public sector will be combined into BT Business under the new Business and Public Sector segment, which it said will help Global Services focus on serving companies and customers outside of the UK. Additionally, EE's mobile virtual network operator operations and some specialist businesses in the BT Business segment will move into BT Wholesale.
The company said it will announce the financial effect of these changes in due course.
BT said the BT Consumer division had a "stand out quarter" with revenue up 11%, helped by good customer growth in broadband, television and mobile, which drove up average revenue per user 7%. The company added 130,000 retail broadband customers, and added 250,000 fibre broadband customers, taking its total customer base to 3.7 million. BT also added 97,000 television customers in the quarter, driven by demand for its BT Sport service.
Elsewhere BT also saw 3.0% revenue growth in its Openreach network infrastructure division as growth in fibre broadband was partly offset by regulatory price changes, and BT Global Services and BT Wholesale also up, whilst its BT Business segment was flat.
BT continues to expect modest growth in adjusted earnings before interest, tax, depreciation and amortisation for its full year and normalised free cash flow of around GBP2.8 billion. It expects revenue growth, excluding transit, of 1% to 2% for the year.
It expects to grow its dividend by 10% to 15% for the full year and complete a share buyback of around GBP300 million.
BT completed its GBP12.5 billion acquisition of EE last Friday after it was officially cleared by the UK's Competition and Markets Authority earlier this month without any remedies.
"This is a strong set of results with good numbers across the board. We are making good progress towards our goal of sustainable profitable revenue growth," said Chief Executive Gavin Patterson.
"These are exciting times at BT. We have completed our acquisition of EE, the UK's best mobile network provider, and are confident that we'll deliver the anticipated cost and revenue synergies. EE will become a separate consumer-focused line of business within the group," Patterson added.
"We're also creating a new organisation to better serve our business and public sector customers in the UK, combining BT Business with EE's business division and parts of BT Global Services' UK operations. BT Global Services will focus on serving multinational companies and major customers outside the UK," he said.
Shares in BT were up 3.0% at 499.15 pence, the best performer in the FTSE 100.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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