BT’s outgoing boss Philip Jansen has blamed London investors’ ‘short term’ outlook for his firm’s lengthy share price slump in a defence of his tenure at the top of the telecoms giant.
Jansen said he was “not perfect” but believed the strategy he put in place was not adequately rewarded by equity markets.
UK investors “seem to have a focus more on the short term and find it harder to look at the longer term”, especially when compared to the US, Jansen said in an interview with The Sunday Times.
Jansen’s complaints are not new, with a number of City watchers having critiqued the relative underperformance of UK companies.
Respected stockpicker Nick Train said similar last week.
Jansen, whose key call was a major, long-term investment in the transformation of the copper network into fibre, said the short-term focus was always a “challenge for BT when you’re investing in initiatives and infrastructure that takes 10 to 12 years to build and will be used for many, many decades — it was 100 years or more in the case of copper.
“Inevitably you have to take a long term view of it and public markets seem to find it hard.”
However, one analyst pushed back on Jansen’s read of the market today and said the short-termist mindset from investors went beyond just London.
“I don’t think that’s a completely fair assessment given that foreign investors own around two thirds of listed UK shares, so reticence towards UK companies is coming from overseas as well,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, told City A.M.
“The London market has struggled to recover partly due to Brexit effect, current UK economic troubles but also the make up of the indices with far less of a tech focus, and so have been left on the sidelines of the recent AI fuelled euphoria.”
She added that investors had a “cautious response to BT’s big cost cutting initiative” as it underlined the “scale of the challenge ahead”.
Jansen’s comments come after the British businessman last week announced his plans to step down in the next year.
Jansen took over as chief exec of the beleaguered firm four years ago, inheriting a company known for poor customer service and decades of underinvestment.
“I’m not perfect and as a CEO there are always more things you can do,” said Jansen, responding to accusations from former BT directors that he would “appoint a few people to do the job and walk off,” and that he “was more like an executive chairman than a CEO.”
“As the CEO, I’ve tried to make sure we have a winning long-term strategy and a crystal clear plan of action,” Jansen added.
In 2021 the chief exec struck a deal with Ofcom, allowing BT to invest £15bn in upgrading the network to fibre.
But the investment hit cashflow hard and led to a decline in BT’s share price even though BT estimate that £1bn extra a year will return to the company after fibre is fully rolled out.
BT Group’s shares are down 30.5 per cent since a year ago and over 43 per cent from five years ago.
Jansen said the group’s shareholders “totally support the strategy, but they’re just disappointed that there aren’t enough people buying the shares and [the market] is focused on the short-term cashflow, which I accept is brutal.”
The search for Jansen’s successor is already underway. Emerging as a frontrunner is EE chief Marc Allera who “knows the business inside and out” according to Paolo Pescatore, media analyst at PP Foresight.