BT reported a solid third quarter of the year in a statement to markets this morning, with boss Philip Jansen hailing a “transforming” firm.
Revenue in the three quarters to the end of December crept up to £15.6bn, a small fall on last year which the firm put down to inflationary headwinds and legacy product declines.
Profit after tax sits at a comfortable £1.3bn, with capex spend of £3.8bn as the firm looks to build for the future.
“On full fibre, we’re building – and now connecting – like fury: 9.6 million premises reached to date, with 29 per cent already connected, and our 5G mobile network now reaches 60 per cent of the UK population,” chief exec Jansen said this morning.
BT saw its highest ever customer growth in ‘FTTP’ – fibre to the premises – in the third quarter and it also said that “churn continues to remain stable in a competitive market.”
City watchers will turn to Patrick Drahi, whose Altice Group holds a significant double-digit percentage stake in the telecoms giant, for his reaction.
He has said previously he believes the firm’s stock is “undervalued.”
The firm has lost around 50 per cent of its value in the past 5 years, though they are not alone in the telecoms space: Vodafone is down by even more than that.
The firm confirmed it had offloaded BT Sport in its results.
Charlie Huggins, head of equities at Wealth Club, said high inflation posed a challenge to BT’s business model.
He said: “Telecoms is a mighty challenging sector. There’s little to differentiate providers and regulators and consumers are always demanding more for less. So while BT is pushing through price increases, it must be careful not to push too hard.
“Then there are the huge cash demands – BT will spend around £5bn this year alone to maintain and upgrade its infrastructure, and it will have to keep the spending taps open to remain competitive. If inflation remains elevated, these costs are only likely to increase.
BT’s solution to these challenges is to keep bearing down on costs – it’s aiming for about £3.0bn of cost savings by the end of FY25. The trouble is – it’s a rather blunt tool and does nothing to accelerate top line growth.
Overall, BT faces an uphill battle in the current inflationary environment, and will have to run very hard just to stand still.”