BT highlights improvement in underlying revenue excluding transit in FY14

8 May 2014

British fixed line incumbent BT has released its financial results for the year ended 31 March 2014, with adjusted turnover flat at GBP18.287 billion (USD29.05 billion). With reported revenue said to have increased by 1% compared to FY 2013, BT said that it had recorded a GBP2 million positive impact from foreign exchange movements, a GBP19 million positive net impact from acquisitions and disposals and a GBP176 million reduction in transit revenue in the year under review. The group’s key measure of its revenue trend, underlying revenue excluding transit, was up 0.5% compared with a 3.1% decline last year, which BT said reflected improved performances from BT Global Services, BT Consumer and BT Business, though it did note that regulatory price reductions impacted revenue by between GBP150 million and GBP200 million in the year.

BT’s operating costs in FY14 declined by GBP25 million to GBP12.171 billion, and while underlying operating costs excluding transit were up 1% it said that excluding the investment of around GBP450 million in BT Sport and a GBP64 million non-cash increase in the pensions operating charge, underlying operating costs excluding transit actually fell by 3% year-on-year. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the twelve-month period totalled GBP6.116 billion, meanwhile, in line with BT’s GBP6.0 billion-GBP6.1 billion forecast, while it said its strong cost control had offset investment in BT Sport. Reported profit before tax stood at GBP2.312 billion in the twelve-month period, ‘broadly level’ with the prior year, while adjusted profit before tax was GBP2.827 million, up 6% y-o-y which reflected ‘the benefit of [BT’s] focus on capital expenditure efficiencies and debt reduction’.

In operational terms, at the end of March 2014 BT had a total of 7.281 million retail broadband subscriptions, up from 6.704 million a year earlier. In terms of fibre-based broadband connectivity, BT said that its network arm Openreach was ahead of its original schedule, with more than 19 million premises passed. With regards to uptake, Openreach reportedly achieved 1.3 million net fibre additions in the fiscal year, 45% more than in the previous twelve-month period, and bringing the number of homes and businesses connected via fibre to more than 2.7 million. For BT itself, it added 869,000 retail fibre broadband customers in FY 2014, with these additions increasing its total to more than 2.1 million. Pay-TV subscriber numbers also continued to increase, rising from 810,000 at end-March 2013 to just over a million (1.002 million) a year later. Residential fixed voice lines in service meanwhile declined, falling to 9.908 million at the end of the reporting period from 10.207 million a year earlier.

United Kingdom, BT Group (incl. Openreach)