Financial Results Q2 2014

Results for the second quarter and half year to 30th September 2014

BT Group plc (BT.L) today announced its results for the second quarter and half year to 30 September 2014.

		Second quarter to 30 September 2014		Half year to 30 September 2014
		£m	Change	£m	Change
Revenue1		4,383	(2)%	8,737	(2)%
Underlying revenue2 excluding transit			0.2%		0.3%
EBITDA1		1,450	1%	2,885	0%
Profit before tax	- adjusted1	690	13%	1,328	10%
	- reported	563	13%	1,109	17%
Earnings per share	- adjusted1	6.9p	15%	13.4p	13%
	- reported	5.6p	(28)%	11.2p	(8)%
Interim dividend				3.9p	15%
Normalised free cash flow3		533	£(77)m	655	£105m
Net debt				7,063	£(1,011)m

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

“This was a solid quarter, with results slightly ahead of market expectations as we reduced costs and grew EBITDA.  Profit before tax was up 13 per cent. 

“Our Consumer business continues to perform well thanks to the impact of BT Sport where Premier League audiences are up around 45 per cent on average.  Fibre is also driving growth with one in three of our retail broadband customers enjoying super-fast speeds.

“Our fibre footprint has increased to more than 21 million premises and will continue to grow.  We continue to see strong demand across the market for the faster speeds that fibre offers.

“Further improving customer service remains a priority and Openreach is recruiting an additional 500 engineers to help us better serve our customers.  We have also launched a range of new cloud-based products and services aimed at the business market.

“We are delivering on our strategy and our outlook remains unchanged.  Our confidence enables us to raise our interim dividend by 15 per cent to 3.9p.”

Key points for the second quarter:

• Underlying revenue2 excluding transit up 0.2%
• Underlying operating costs4 excluding transit down 1%
• EBITDA1 up 1% and earnings per share1 up 15%
• 344,000 Openreach fibre broadband net connections, up 9%
• Interim dividend up 15% to 3.9p
• Outlook reaffirmed

1 Before specific items.  Specific items are defined on page 3
2 Excludes specific items, foreign exchange movements and the effect of acquisitions and disposals
3 Before specific items, purchases of telecommunications licences, pension deficit payments and the cash tax benefit of pension deficit payments
4 Excludes specific items, foreign exchange movements and the effect of acquisitions and disposals, and is before depreciation and amortisation

GROUP RESULTS FOR THE SECOND QUARTER AND HALF YEAR TO 30 SEPTEMBER 2014

	Second quarter to 30 September			Half year to 30 September
	2014	2013	Change	2014	2013	Change
	£m	£m	%	£m	£m	%
Revenue
- adjusted1	4,383	4,491	(2)	8,737	8,940	(2)
- reported	4,441	4,491	(1)	8,795	8,940	(2)
- underlying revenue excluding transit			0.2%			0.3%
EBITDA
- adjusted1	1,450	1,434	1	2,885	2,874	0
- reported	1,396	1,382	1	2,787	2,738	2
Operating profit
- adjusted1	832	757	10	1,615	1,500	8
- reported	778	705	10	1,517	1,364	11
Profit before tax
- adjusted1	690	609	13	1,328	1,204	10
- reported	563	499	13	1,109	948	17
Earnings per share
- adjusted1	6.9p	6.0p	15	13.4p	11.9p	13
- reported	5.6p	7.8p	(28)	11.2p	12.2p	(8)
Interim dividend				3.9p	3.4p	15
Capital expenditure2	533	595	(10)	1,049	1,191	(12)
Normalised free cash flow3	533	610	(13)	655	550	19
Net debt				7,063	8,074	£(1,011)m

 

Line of business results1

	Revenue				EBITDA			Free cash flow3
Second quarter to	2014	20134	Change		2014	20134	Change	2014	20134	Change
30 September	£m	£m	%		£m	£m	%	£m	£m	%
BT Global Services	1,649	1,743	(5)	226		222	2	35	91	(62)
BT Business	789	799	(1)	258		247	4	231	217	6
BT Consumer	1,056	987	7	225		158	42	105	11	n/m
BT Wholesale	529	624	(15)	125		159	(21)	60	154	(61)
Openreach	1,245	1,271	(2)	627		642	(2)	339	311	9
Other and intra-group items	(885)	(933)	5	(11)		6	n/m	(237)	(174)	(36)
Total	4,383	4,491	(2)	1,450		1,434	1	533	610	(13)

 

1 Before specific items 
2 Before purchases of telecommunications licences
3 Before specific items, purchases of telecommunications licences, pension deficit payments and the cash tax benefit of pension deficit payments
4 Certain results have been restated.  See Note 1 to the condensed consolidated financial statements
n/m = not meaningful