BT Group PLC results for the third quarter and nine months to 31 December 2013

BT Group plc (BT.L) today announced its results for the third quarter and nine months to 31 December 2013.

 

 

 

 

 

 

 

 

 

 

 

		Third quarter to 31 December 2013		Nine months to 31 December 2013
		£m	Change1	£m	Change1
Revenue2		4,599	2%	13,539	0%
Underlying revenue excluding transit			2.4%		0.3%
EBITDA2		1,537	0%	4,411	(2)%
Profit before tax	- adjusted2	722	8%	1,926	5%
	- reported	617	6%	1,565	(7)%
Earnings per share	- adjusted2	7.3p	12%	19.1p	6%
	- reported	6.3p	11%	18.5p	4%
Normalised free cash flow3		554	£(253)m	1,104	£105m
Net debt				7,640	£(500)m

Gavin Patterson, Chief Executive, commenting on the third quarter results, said:

"This is an encouraging set of results, with profit before tax up 8%, earnings per share up 12% and growth in revenue.

"Our strategic investments are delivering. It was another record quarter for fibre take-up and there are now more than 18 million premises with access to our fibre. That number will grow further as the BDUK programme progresses.

"Fibre helps SMEs to compete and underpins our TV plans. Our direct BT Sport customer base passed 2.5 million in the quarter and helped to support 6% revenue growth in our Consumer business. We achieved some particularly strong audience figures in December and the exclusive rights to the UEFA Champions League and UEFA Europa League that we have won will further strengthen the appeal of our proposition.

"Outside the UK our businesses in the high-growth regions of the world again delivered double-digit revenue growth.

"The momentum on our cost transformation has enabled us to raise our EBITDA outlook for the year. It is important that we keep up the progress we are making across the group whilst continuing to focus on improving the service we provide to our customers.”

Financial highlights for the third quarter:

• Underlying revenue excluding transit up 2.4% compared with a decline of 3.2% in the prior year
• EBITDA2 flat at £1,537m, with cost transformation offsetting the investment in BT Sport
• Earnings per share2 up 12%
• 2013/14 EBITDA2 now expected to be at the upper end of the £6.0bn-£6.1bn range

1 Restated, see Note 1 to the condensed consolidated financial statements
2 Before specific items
3 Before specific items, purchases of telecommunications licences, pension deficit payments and the cash tax benefit of pension deficit payments

GROUP RESULTS FOR THE THIRD QUARTER AND NINE MONTHS TO 31 DECEMBER 2013

Note: In the third quarter and nine months to 31 December 2012, reported revenue and EBITDA included a specific item charge of £151m and £36m, respectively, relating to Ofcom’s determinations on historic Ethernet pricing.

Line of business results2

1 Restated, see Note 1 to the condensed consolidated financial statements
2 Before specific items which are defined below
3 Before specific items, purchases of telecommunication licences, pension deficit payments and the cash tax benefit of pension deficit payments

 

Notes:

• The commentary focuses on the trading results on an adjusted basis being before specific items. Unless otherwise stated, revenue, operating costs, earnings before interest, tax, depreciation and amortisation (EBITDA), operating profit, profit before tax, net finance expense, earnings per share (EPS) and normalised free cash flow are measured before specific items. This is consistent with the way that financial performance is measured by management and is reported to the Board and the Operating Committee and assists in providing a meaningful analysis of the trading results of the group. The directors believe that presentation of the group’s results in this way is relevant to the understanding of the group’s financial performance as specific items are those that in management’s judgement need to be disclosed by virtue of their size, nature or incidence. In determining whether an event or transaction is specific, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence. Specific items may not be comparable to similarly titled measures used by other companies. Reported revenue, reported operating costs, reported EBITDA, reported operating profit, reported profit before tax, reported net finance expense, reported EPS and reported free cash flow are the equivalent unadjusted or statutory measures.

• Underlying revenue, underlying costs and underlying EBITDA are measures which seek to reflect the underlying performance of the group that will contribute to long-term profitable growth and as such exclude the impact of acquisitions and disposals, foreign exchange movements and any specific items. We focus on the trends in underlying revenue excluding transit revenue as transit traffic is low-margin and is significantly affected by reductions in mobile termination rates.