BT reported revenue of £10.4bn for the six month period to 30-September, in line with the prior year; adjusted revenue £10.4bn, up 3% on a pro forma basis due to increased fibre-enabled product sales, inflation-linked pricing and improved lower margin trading in Business partially offset by legacy product declines. Adjusted EBITDA amounted to £4.1bn, up 6%; and up 4% on a pro forma basis with revenue flow through and strong cost control more than offsetting cost inflation and one-off items in the prior year; Business EBITDA decline due to increased input costs and legacy high-margin managed contract declines.
Reported capital expenditure was £2.3bn, down 11% with lower fixed network spend driven by lower FTTP build unit costs.
Some highlights
- FTTP build rate accelerated to 66k per week delivering a record of 860k premises passed in the quarter, FTTP footprint is now expanded to 12m premises with a further 6m where initial build is underway
- Strong customer demand in Openreach for FTTP with net adds of 364k in Q2, bringing take-up rate to 33%
- Openreach broadband ARPU grew by 10% year-on-year due to price rises and increased volumes of FTTP; Openreach broadband line losses of 255k in H1, a 1% decline in the broadband base; whilst the company continues to target a decline of around 400k in FY24, softer market conditions increase the risk that losses will be above this level
- Consumer broadband ARPU for the year to date increased 4% year-on-year and Consumer postpaid mobile ARPU for the year to date increased 9% year-on-year; churn for the year to date remains stable for both broadband and postpaid mobile at 1.1% and 1.0% respectively
- In October ‘New EE’ was launched with a modern digital platform and a set of converged products and services
- Retail FTTP base grew year-on-year by 48% to 2.2m of which Consumer 2.1m and Business 0.1m; 5G base 9.9m, up 42% year-on-year
- Cost transformation on track with gross annualised cost savings of £2
Philip Jansen, Chief Executive, commenting on the results, said
“These results show that BT Group is delivering and on target: we’re rapidly building and connecting customers to our next generation networks, we’re simplifying our products and services, and we’re now seeing predictable and consistent revenue and EBITDA growth.
“We’ve strengthened our competitive position with the launch of both New EE and our renewed strategy in Business, and Openreach has now built full fibre broadband to more than a third of the UK’s homes and businesses with a growing connection rate. Our transformation programme has now delivered £2.5bn in annualised savings, well on track to meet our £3bn savings target by FY25.