Group-wide sales at BT were down 1% year on year to £3.7bn in the final quarter of its fiscal 2014, and full-year sales were flat at £18.29bn, with growth coming mostly from the consumer side of the business, thanks to uptake of its BT Sport service. This is in contrast to six months ago when investment in the service damaged company profits.
Chief executive Gavin Patterson reported this morning that BT Sport, which is now live in around five million homes, “underpinned a record 9% growth in the fourth quarter and the lowest line losses in over five years".
Elsewhere at BT the fourth-quarter headline figures were not so rosy, with Global Services down 4% to £1.86bn, largely due to decreasing transit revenues and foreign exchange movements.
BT Business is down 3% to £895m due to declining legacy business, call and line volumes, and a strong prior year performance on IT services, and BT Wholesale is down 15% to £571m, driven by lower volumes and mobile termination rate reductions, while Openreach stayed flat at £1.27bn, with the negative impact of regulatory price changes offsetting growth in fibre broadband and Ethernet revenues.
Group EBITDA in the fourth quarter grew 2% year on year to £1.71bn, and adjusted pre-tax profit was up 9% to £901m. For the full year, EBITDA was flat at £6.12bn, and adjusted pre-tax profit went up 6% to £2.82bn.
In his statement, Patterson said that in spite of the uninspired revenue figures, BT was making strong progress with underlying sales, adjusted pre-tax profit and free cash flow all beating previous expectations.
The chief executive pointed to healthy growth in order intake at BT Global Services, BT Business and BT Wholesale.
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“These results provide a strong platform for growth from which to achieve our outlook for the years ahead,” said Patterson. “Our cost transformation programmes are helping to drive the strong cash flow of the group.”
Gartner research director, Katja Ruud, said BT's management was having to tread a fine line between defending its legacy businesses in a competitive market, and attacking new business.
"It is a fact that significant parts of their portfolio is commoditised or under price pressure, so to continue to maintain revenues is challenging. To show growth on top of that will be the next step," she said.
Ruud said she was "cautiously optimistic" about BT's outlook, noting that its management team was well aware of the pressures the firm is under, and the direction in which the market is heading.
Fibre rollout, BDUK hailed
BT also released figures suggesting it has already beaten its target of having 19 million homes and businesses connected to fibre by the end of 2015, and claimed the UK now has the widest fibre availability of the EU big five (France, Germany, Italy, Spain and the UK), according to Ofcom’s European Broadband Scorecard.
During the final quarter of the year, 347,000 new premises took fibre over BT’s network, taking the Openreach fibre broadband base to over 2.7 million.
It also said that over 630,000 rural premises had now been hooked up to fibre under the auspices of the controversial Broadband Delivery UK (BDUK) plan.
In a statement, communications minister Ed Vaizey claimed the figures demonstrated the government’s aim to bring superfast broadband speeds to 95% of the UK by 2017 was “well on track.”