07 November 2024
If you are covering BT’s H1 results, please find comments below from Matt Dorset, equity analyst at Quilter Cheviot:
"BT’s half-year results were a mixed bag, with revenue coming in weaker than expected, down 3% year-on-year and 2% below consensus. This decline was primarily driven by the underperformance in the Business division, particularly in non-UK trading within the Global and Portfolio Channels. However, it’s worth noting that this was largely low-margin revenue, which allowed earnings (EBITDA) to perform better, increasing by 0.5% and surpassing consensus expectations of flat growth. Free cash flow was a standout, up 57% year-on-year and in line with consensus.
“Openreach continues to be a strong performer, with 2% revenue growth and 7% earnings growth, bolstered by price increases and fibre upsell. On the other hand, the Consumer division saw a 2% decline in revenue with flat earnings.
“The fibre build-out is progressing well, with over 16 million homes passed and a strong fibre take-up rate of 35%, supported by a record quarter for fibre net additions of 446,000. BT has also managed to lower its cost to build, now expecting to reach an additional 200,000 homes within the same capex budget. There was a small improvement in Openreach line losses, though they remain relatively high at -181,000.
“Given the revenue weakness, BT has adjusted its full-year revenue guidance from a growth of 0-1% to a decline of 1-2%. Despite this, the company has reiterated all other guidance and its mid-term free cash flow targets.
“Overall, while the revenue figures are disappointing, the stronger performance in earnings and free cash flow, along with the progress in the fibre build, provide some positive takeaways from these results."
