Challenging second quarter for BT
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Editor
| 01 November 2018

As it gets itself organised for the arrival of new chief executive Philip Jansen after the departure of Gavin Patterson, BT had ended its first half year facing a number of business headwinds.


For the second quarter and half year to 30 September 2018,BT reported revenue of £11.588 billion, down 2% year-on-year, and adjusted revenue of £11.624 billion down 1% on an annual basis as growth in consumer business was offset by regulated price reductions in Openreach and declines in its enterprise line. Specifically, revenue growth for the half year was driven by a higher volume and mix of high-end smartphones, improved mix of direct distribution, ‘more for more’ pricing in broadband and mobile, growth in the SIM-only base across all the brands and all customers now paying for BT Sport.

As a result of the revenue growth, the company reported profit before tax of £1.340 billion and adjusted EBITDA of £3.675 billion, up 2%, mainly driven by higher volume and mix of high-end smartphones in BT’s consumer business and restructuring related cost savings. EBITDA also grew due to supplier rebates in the period but was partially offset by increased contractual UEFA sports rights costs.

Looking at the TV business line, BT noted that its second quarter saw a continued improvement in its BT Sport proposition, including a recent long-term extension to its content supply agreement with Sky, holding its first pay-per-view event in the quarter, and now merged-in EE customers are able to now use the BT Sport App on their TV via casting. TV audience figures also continued to grow across platforms. The UEFA Champions League group stages saw a 46% increase in viewing figures compared with the same matches last season and BT Sport claimed that its current Premier League average audience was up 9% year-on-year with a new record for digital-only viewing.

Philip Jansen will take the reins of BT in February 2019 and making his summation of the penultimate quarterly financial results under his charge, Gavin Patterson said: “We continued to generate positive momentum in the second quarter resulting in encouraging results for the half year. We are successfully delivering against the core pillars of our strategy with improved customer experience metrics, accelerating ultrafast deployment and positive progress towards transforming our operating model...Our strategy is delivering, with benefits evident from the steps we’ve been taking to simplify and strengthen the business and improve efficiency. Despite increasingly competitive fixed, mobile and networking markets and continued declines in legacy products there is no change in our overall outlook for the full year.”