BT revenues in FY 2016 boosted by completion of EE acquisition

5 May 2016

British fixed line incumbent BT has reported a 6% year-on-year increase in revenues in the year to 31 March 2016, bolstered by the inclusion of mobile network operator EE after completing acquisition of the latter on 29 January. For the twelve month period under review BT generated a total turnover of GBP18.909 billion (USD28.5 billion), while in the fourth quarter of the fiscal year revenues totalled GBP5.656 billion, representing a 22% y-o-y increase. BT noted that EE had contributed GBP1.038 billion of external revenue in the two months since its acquisition. Underlying revenue excluding transit was up 2% in the company’s latest fiscal year, with the same metric seeing a 1.3% increase in the last quarter.

Adjusted operating costs increased by GBP749 million to GBP12.329 billion in FY2016, while adjusted EBITDA of GBP6.580 billion represented a 5% y-o-y increase; the latter figure included GBP261 million from EE. Excluding foreign exchange movements and the effect of acquisitions and disposals, underlying EBITDA was up 1% for the full year period. Adjusted profit before tax stood at GBP3.473 billion in FY16, an increase of 9% from the previous fiscal year, with reported profit before tax (which includes specific items) totalling GBP3.029 billion (up 15%).

In operational terms, excluding EE a total of 94,000 retail broadband customers were added by BT in the three months to 31 March 2016, a figure the company claimed represented 72% of the DSL and fibre broadband market net additions in the UK over the period. Superfast fibre broadband growth continued with 204,000 retail net additions for BT, bringing the number of customers now signed up to its fibre-based broadband to 3.9 million, representing almost half of its entire broadband customer base; a further 184,000 EE-branded fibre-based connections brought the overall fibre total to 4.076 million. Total broadband accesses numbered 9.041 million, including 951,000 EE broadband lines, up from 7.713 million a year earlier. Active fixed voice consumer lines declined, however, falling to 9.366 million at end-March 2016 from 9.447 million a year earlier. In the mobile arena, BT said it had continued to build on the success its launch of BT Mobile-branded plans, confirming that more than 400,000 SIM-only customers had signed up to date. On the back of such progress, the operator said it intends to launch handset offerings to BT Mobile customers next year.

For its part, EE’s total customer base (including mobile and fixed broadband) was reported as being 30.6 million, with the cellco having added 54,000 post-paid mobile customers in the two months since its acquisition by BT, taking the post-paid total to 15.4 million. 4G accesses also continued to rise, standing at 15.1 million at the end of the reporting period. By comparison, pre-paid accesses declined by 426,000 to bring the total down to 8.3 million, attributed to a seasonal drop following Christmas trading, faster migrations to post-paid, and greater price competition from the MVNO market. The number of customers signed up to an MVNO offering services over the EE network reached 3.7 million at end-March 2016.

Commenting on the results, BT chief executive Gavin Patterson was cited as saying: ‘This has been a landmark year for BT. We’ve completed our acquisition of EE … we’ve passed more than 25 million premises with fibre and we’ve also delivered a strong financial performance. We’ve met our outlook with our main revenue measure up 2.0%, the best performance for more than seven years. Our profit before tax was up a healthy 9%.’

United Kingdom, BT Group (incl. Openreach), EE