BT’s key measure of revenue trend down on anticipated impact of regulatory price reductions

26 Jul 2013

British fixed line incumbent BT has published it financial results for the first quarter of its 2013/14 financial year, revealing that underlying revenue excluding transit, its key measure of revenue trend, was down 1% year-on-year. This decline, the operator said, reflected the anticipated impact of regulatory price reductions. Reported turnover was also 1% lower than in 1Q 2012/13 at GBP4.449 billion (USD6.99 billion), in part as a result of a GBP51 million decline in transit revenue, including mobile termination rate reductions of GBP29 million; a GBP32 million positive impact from foreign exchange movements and a GBP 8 million positive net impact from acquisitions and disposals failed to fully offset these declines.

BT meanwhile said that underlying operating costs excluding transit were down 1%, noting that its efficiency programmes had been partly offset costs of GBP40 million related to the pre-launch of its BT Sport service, as well as a GBP13 million increase in the non-cash pension operating charge. Adjusted EBITDA fell by 1% year-on-year to GBP1.44 billion, with adjusted profit before tax standing at GBP595 million, representing a 5% increase from the year earlier period, with BT saying that the growth reflected the lower depreciation and amortisation and net finance expense. Reported profit before tax (which includes specific items), however, totalled GBP£449m, down 16% year-on-year.

Highlighting the progress made on its fibre broadband rollout programme, BT confirmed that more than 16 million premises are passed by its network, with more than 1.7 million homes and businesses having signed up for its fibre-based services. Total retail broadband subscribers, meanwhile, numbered 6.799 million, up from 6.365 million a year earlier, while BT’s wholesale broadband subscriber base rose to 8.860 million from 8.577 million at end-June 2012. Pay-TV customer numbers increased to 833,000 from 728,000 a year earlier.

Commenting on the results, BT’s outgoing chief executive Ian Livingston said: ‘BT continues to make good progress, delivering another quarter of solid growth in underlying profit before tax. This is despite the impact of regulation and the significant investments we are making for the future.’

United Kingdom, BT Group (incl. Openreach)