- Adjusted Earnings Missed Estimates: BT’s adjusted EBITDA for the fourth quarter was reported at GBP1.97 billion, falling short of the estimate of GBP2 billion.
- Segment Performance:
- Consumer adjusted EBITDA was GBP659 million, slightly below the expected GBP662.7 million.
- Openreach adjusted EBITDA also missed estimates at GBP942 million compared to the expectation of GBP964 million.
- The business unit adjusted EBITDA met its estimate closely at GBP380 million.
- Revenue Figures:
- Adjusted revenue for the quarter was GBP5.05 billion, just under the GBP5.07 billion estimate.
- Openreach adjusted revenue reached GBP1.51 billion, marginally short of the GBP1.52 billion forecast.
- Conversely, the business unit’s adjusted revenue exceeded expectations at GBP1.99 billion against a GBP1.95 billion estimate.
- Year-End Results:
- Total adjusted revenue for the year was GBP20.37 billion, close to the estimate of GBP20.4 billion.
- Dividend per share was declared at 8.160p.
- Normalized free cash flow came in higher than expected at GBP1.60 billion, against an estimate of GBP1.53 billion.
- Pretax profit was GBP1.33 billion, significantly below the estimated GBP1.8 billion.
- Adjusted basic EPS met the estimate at 18.8p.
- Capital expenditure totalled GBP4.86 billion.
- Future Guidance and Strategic Plans:
- BT plans for sustained growth in group revenue and UK service revenue from FY27, with EBITDA growth expected to outpace revenue growth.
- The company aims to reduce capital expenditure (excluding spectrum) by more than £1 billion from FY26 levels.
- Normalized free cash flow is expected to reach around £2.0 billion in FY27 and approximately £3.0 billion by the end of the decade.
- A new Full Fibre-to-the-Premises (FTTP) build target of up to 5 million is set for FY26, supporting the December 2026 target of 25 million.
- The company progresses on its five-year £3 billion cost reduction programme, achieving 30% of its target (£0.9 billion) in annualised cost savings by FY25 at an anticipated cost of £0.4 billion.
- Analyst Recommendations: There are 12 buy ratings, 4 hold ratings, and 6 sell ratings on BT’s stock.
BT Group PLC on Smartkarma
Analyst coverage on BT Group PLC on Smartkarma is gaining traction, especially with Baptista Research offering a bullish view. Baptista Research‘s report titled “BT Group: Initiation of Coverage- Expansion of Fiber Network Infrastructure To Up Their Game!” praises BT Group’s strategic priorities progress, despite facing challenges in certain segments. The company’s focus on enhancing its UK presence, accelerating fiber build-out, reducing costs, and improving customer satisfaction is well-received.
In particular, BT Group’s Openreach division is lauded for achieving significant milestones in fiber build-out and connections, surpassing expectations, and maintaining a market-leading position with a strong take-up rate of 35%. This positive sentiment from Baptista Research reflects optimism regarding BT Group’s expansion of fiber network infrastructure and its potential to enhance its competitive position in the market.
A look at BT Group PLC Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 4 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 3.4 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
BT Group PLC, a telecommunications services provider, showcases a promising long-term outlook based on the Smartkarma Smart Scores. With a strong momentum score of 5, the company seems to be gaining positive traction in the market. Additionally, a high dividend score of 4 suggests stability and potential returns for investors. While the resilience score of 2 indicates some level of vulnerability, the value and growth scores of 3 each signify a balanced performance in terms of financial health and future expansion prospects.
In summary, BT Group PLC stands out for offering a wide range of telecommunications services, including local and international call products, broadband solutions, and internet access. Its overall Smart Scores paint a picture of a company with solid dividend yields, impressive momentum, and room for growth, despite facing some resilience challenges. Investors may find value in monitoring how BT Group PLC navigates these factors in the long run.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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