BT reported a modest set of first quarter results with broadband and TV revenue seeing healthy growth.
The telecoms titan reported revenue of £4.2bn, a 2% year-on-year decline, but adjusted profit before tax rose 9% to £694m, ahead of City expectations of about £683.
The consumer business reported its sixth consecutive quarter of revenue and profit growth, with a 7% boost in broadband and TV sales. The business added 85,000 retail broadband customers and announced that it would hand up to £129m of government funding it received from BDUK back to local authorities.
“The Government was clear from the start that as levels of people taking up superfast broadband went beyond our expectations in areas where we invested public money, BT would reimburse the taxpayer for reinvesting into further coverage across the UK,” said culture secretary John Whittingdale. “This now means that BT will be providing up to £129m cashback for some of the most hard to reach areas.”
Gavin Patterson, CEO of BT Group commented: “BT’s fibre network is accessible to more than 23 million premises. Four out of five UK homes and businesses can access it and 4.6m are now connected. We’ve hit our original take-up assumption and have rolled out ahead of target and on budget. This is a real success story for the UK.”
“We are delighted to be able to share that success by making up to £129m available to extend the roll-out to more BDUK homes and businesses, earlier than planned and at no extra cost to the taxpayer.”
Openreach, which is now at the centre of an industry -wide regulatory dispute, saw relatively flat revenues of £1.25bn. Patterson kept comments to a minimum but said that BT was ’engaging with Ofcom as part of its Strategic Review of Digital Communications’ and that the process offered ‘scope for deregulation and the potential to create a more level playing field in pay-TV’.
The firm managed to sign up more than 100,000 consumer mobile customers without the marketing team lifting a finger. BT currently has a virtual network agreement with EE, as the two firms continue to push for a merger.
Paolo Pescatore, analyst and director of Multiplay and Video at CCS Insight said that while the results overall were modest, the mobile figures were a definite win.
“[The results] reflect an encouraging start to BT’s return to the consumer mobile market,” Pescatore commented. “Having added more than 100,000 users within three months it shows that there is a strong appetite among its customers to sign up to more services. This further validates its cross selling strategy, its move back into mobile and with its acquisition of EE, BT will have an extensive retail footprint to showcase a wider range of services.”
Patterson said that completion of the acquisition of EE would allow BT ‘to create a true UK digital champion, providing customers with greater choice and value and helping to deliver the UK’s connected future’.
“The investments we are making in our business and customer service are building a strong platform for growth. And our financial results show we’re on track to achieve our outlook for the full year,” he concluded.