BT Group Interims

[idpickering]

BT Group plc (BT.L) today announced its results for the half year to 30 September 2019.

Key strategic developments:

· Launched a host of new products for consumer and business segments, including the new Halo converged product plans and BT Mobile 5G

· Introduced a range of new service initiatives including bringing the BT brand to the high street in over 600 EE/BT dual-branded stores, and to answer 100% of customer calls in the UK & Ireland from January 2020

· Continued to make progress on the BT modernisation agenda, including delivering over £1.1bn transformation benefits, announcing the first locations in our Better Workplace Programme, and disposal of BT Fleet Solutions

· Outlined our Skills for Tomorrow programme to provide digital skills training for 10m UK children, families and businesses

Operational:

· 5G network live in over 20 cities and large towns; 5G smartphone plans now available on both EE and BT brands

· Openreach announced the launch of new FTTP 1Gbps and 550Mbps products. FTTP rollout at c.23k premises passed per week; 4.2m ultrafast (FTTP and Gfast) premises passed to date; currently announced plans to build FTTP in 103 locations

· Consumer fixed ARPC £38.5, broadly flat year on year; postpaid mobile ARPC £20.8, down 5.5% year on year due to impact of regulation and continued trend towards SIM-only; RGUs per address up to 2.38

· Postpaid mobile churn remains low at 1.2% in Q2 despite impact of auto switching; fixed churn at 1.3% in Q2 down from 1.6% in prior year

Financial:

· Reported revenue £11,467m, down 1%1 mainly reflecting the impact of regulation, declines in legacy products, and strategically reducing low margin business

· Reported profit before tax £1,333m, broadly flat year on year; adjusted2 EBITDA £3,923m, down 3%1 due to lower revenues, increased spectrum fees, content costs and investment to improve competitive positioning partly offset by cost savings from transformation programmes

· Net cash inflow from operating activities of £2,173m; normalised free cash flow2 of £604m, down 38% due to increased capital expenditure, higher interest and tax payments, partially offset by one-off cash flows

· Capital expenditure £1,882m. Up £225m excluding BDUK grant funding deferral, driven by increased network investment

· Net debt2 increased primarily due to implementation of IFRS 16, £6.1bn, and net business cash outflows, £1.2bn

· Interim dividend of 4.62p per share; 30% of last year's full-year dividend of 15.4p per share

· Overall financial outlook maintained

https://www.investegate.co.uk/bt-group- ... 00047069R/

[monabri]

Interim dividend unchanged from last year for those holders of BT.

[daveh]

From the pdf

Dividend

In line with our dividend policy BT is declaring an interim dividend of 4.62 pence per share, which is 30% of last year’s full-year dividend of 15.40 pence per share.

The Board expects to hold the full-year dividend unchanged at 15.40 pence per share for this financial year, given our current performance and outlook for earnings and cash flow over this period.

The Board remains committed to our dividend policy, which is to maintain or grow the dividend each year whilst taking into consideration a number of factors including underlying medium term earnings expectations and levels of business reinvestment (which would include the consideration of accelerated FTTP investment).

The interim dividend will be paid on 3 February 2020 to shareholders on the register at 27 December 2019. The ex-dividend date is 24 December 2019. The election date for participation in BT’s Dividend Investment Plan in respect of this dividend is 13 January 2020. The final dividend for the year to 31 March 2019 of 10.78p, amounting to £1,064m, was approved at the Annual General Meeting on 10 July 2019 and paid on 9 September 2019.

[IanTHughes]

Financial Calendar

https://www.btplc.com/Sharesandperforma ... /index.htm

 Ex-Dividend |  Payment  
 24 Dec 2019 | 3 Feb 2020

Ian

[NeilW]

And the market has responded by ... ah who cares.

Income maintained.

[Arborbridge]

No.3 in my top-up list, but I've been holding off. Now I'm out of cash anyway!

Someone said they couldn't truly understand GSK's accounts - I bet these are not much easier

Thankful for the "hold" on dividend, but too many holds spell trouble.

Arb.

[IanTHughes]

No.3 in my top-up list, but I've been holding off. Now I'm out of cash anyway!

Someone said they couldn't truly understand GSK's accounts - I bet these are not much easier

Thankful for the "hold" on dividend, but too many holds spell trouble.

The dividend policy for BT Group (BT-A) contains a proviso that the Interim Dividend will be 30% of the previous year's total. This dividend conforms to that policy and is surely only a "Hold" because last year was a "Hold". We shall have to wait until the the Final Dividend is announced before knowing whether there is a "Hold".


Ian

[Arborbridge]

No.3 in my top-up list, but I've been holding off. Now I'm out of cash anyway!

Someone said they couldn't truly understand GSK's accounts - I bet these are not much easier

Thankful for the "hold" on dividend, but too many holds spell trouble.

The dividend policy for BT Group (BT-A) contains a proviso that the Interim Dividend will be 30% of the previous year's total. This dividend conforms to that policy and is surely only a "Hold" because last year was a "Hold". We shall have to wait until the the Final Dividend is announced before knowing whether there is a "Hold".


Ian

I'm not on the ball as regards such things, but I just see what happens to my divs. .

Thanks for the observation.

[Arborbridge]

Here is my yield chart of BT for approximately ten years:-






As usual, my buy points are in gold, the dividend progression shown in pink squares.

Now is a good time to buy for those with faith and courage!


Arb.

[idpickering]

I have decided to have one more nibble at BT.A shares for this month's top up in my 29 share HYP. That'll make it about 4% in capital value of my HYP whole. That'll do with them for now I think.

Ian.

[TUK020]

Any views on the sustainability of their dividend?

[idpickering]

I have decided to have one more nibble at BT.A shares for this month's top up in my 29 share HYP. That'll make it about 4% in capital value of my HYP whole. That'll do with them for now I think.

Ian.

Coming back to this thread, and my above comment, in short, I've changed my mind on topping these up this month. With the election result pending and the threat of nationalisation to top up now would be folly. Might do so next month though should Uncle Boris retain the keys to No.10. So this months pick for me is BATS instead.

Ian.

[Arborbridge]

I have decided to have one more nibble at BT.A shares for this month's top up in my 29 share HYP. That'll make it about 4% in capital value of my HYP whole. That'll do with them for now I think.

Ian.

Coming back to this thread, and my above comment, in short, I've changed my mind on topping these up this month. With the election result pending and the threat of nationalisation to top up now would be folly. Might do so next month though should Uncle Boris retain the keys to No.10. So this months pick for me is BATS instead.

Ian.

Echoing your thoughts, I seem to have lost any enthusiasm for topping up for the moment. Probably, I will do something, (I have that GNK cash sitting around) but I am not rushing. I'm more leaning towards selling UU or SSE, but will probably wait and see what happens in the opinion polls. My gut feeling is that things are never quite as bad as one feared at the outset.

I'm not sure who it was here who wrote about two years ago: "Don't complain that you haven't been warned" but I hope his dire warnings about utilities will be wide of the mark.

Arb.

[idpickering]

I have decided to have one more nibble at BT.A shares for this month's top up in my 29 share HYP. That'll make it about 4% in capital value of my HYP whole. That'll do with them for now I think.

Ian.

Coming back to this thread, and my above comment, in short, I've changed my mind on topping these up this month. With the election result pending and the threat of nationalisation to top up now would be folly. Might do so next month though should Uncle Boris retain the keys to No.10. So this months pick for me is BATS instead.

Ian.

Echoing your thoughts, I seem to have lost any enthusiasm for topping up for the moment. Probably, I will do something, (I have that GNK cash sitting around) but I am not rushing. I'm more leaning towards selling UU or SSE, but will probably wait and see what happens in the opinion polls. My gut feeling is that things are never quite as bad as one feared at the outset.

I'm not sure who it was here who wrote about two years ago: "Don't complain that you haven't been warned" but I hope his dire warnings about utilities will be wide of the mark.

Arb.

I do agree with you Arb. I don’t mind admitting that I’m a bit nervous regarding my utility holdings, and utility like holdings too. I’m not doing anything about them though, and shall hope that bo-jo wins.

Ian.

[Arborbridge]

Coming back to this thread, and my above comment, in short, I've changed my mind on topping these up this month. With the election result pending and the threat of nationalisation to top up now would be folly. Might do so next month though should Uncle Boris retain the keys to No.10. So this months pick for me is BATS instead.

Ian.

Echoing your thoughts, I seem to have lost any enthusiasm for topping up for the moment. Probably, I will do something, (I have that GNK cash sitting around) but I am not rushing. I'm more leaning towards selling UU or SSE, but will probably wait and see what happens in the opinion polls. My gut feeling is that things are never quite as bad as one feared at the outset.

I'm not sure who it was here who wrote about two years ago: "Don't complain that you haven't been warned" but I hope his dire warnings about utilities will be wide of the mark.

Arb.

I do agree with you Arb. I don’t mind admitting that I’m a bit nervous regarding my utility holdings, and utility like holdings too. I’m not doing anything about them though, and shall hope that bo-jo wins.

Ian.

Not in favour of Johnson - but I just hope the more barking mad wings of either party do not triumph, and in particular (naturally) those ideas which will effect our HYPs and the general economy.

Arb.

[Wizard]

Echoing your thoughts, I seem to have lost any enthusiasm for topping up for the moment. Probably, I will do something, (I have that GNK cash sitting around) but I am not rushing. I'm more leaning towards selling UU or SSE, but will probably wait and see what happens in the opinion polls. My gut feeling is that things are never quite as bad as one feared at the outset.

I'm not sure who it was here who wrote about two years ago: "Don't complain that you haven't been warned" but I hope his dire warnings about utilities will be wide of the mark.

Arb.

I do agree with you Arb. I don’t mind admitting that I’m a bit nervous regarding my utility holdings, and utility like holdings too. I’m not doing anything about them though, and shall hope that bo-jo wins.

Ian.

Not in favour of Johnson - but I just hope the more barking mad wings of either party do not triumph, and in particular (naturally) those ideas which will effect our HYPs and the general economy.

Arb.

This may be heading off topic, but I am not sure I see where the good outcome comes from for the economy. Both main parties seem to have more polarised elements in the ascendancy and an inconclusive result will just prolong uncertainty. On that basis I am sitting on my hands from an investing perspective as I fear there is a strong chance of a major downward move in many share prices. I also fear that there may well be a lot of dividend cuts in the next couple of years as the economy slows. IMHO I am not sure where the good news for BT and many other HYP regulars comes from, other than any further decline in the value of sterling resulting in a rise in pound dividend payments from any companies declaring their dividends in other currencies.

On that basis I would not be topping up BT at this time, but would struggle to justify topping up anything else either.

[88V8]

As of a year ago, BT had the greatest pension liability of any UK Co, relative to its market value.

Given that funding gaps such as this will get a lot worse when the market falls, companies will be keen to offload those liabilities, so it might be more logical to buy Phoenix, or perhaps Chesnara although less so since the Rothesay case.

That BT pension overhang is more than enough to deter me from buying them, even without the threat of McDonnell and the measures he might implement requiring companies to plug their funding gaps at the expense of dividends.
Measures with which one might objectively agree, subject of course to the proviso that they be funded out of someone else's dividends, not mine

V8

[dealtn]

As of a year ago, BT had the greatest pension liability of any UK Co, relative to its market value.

Given that funding gaps such as this will get a lot worse when the market falls, companies will be keen to offload those liabilities, so it might be more logical to buy Phoenix, or perhaps Chesnara although less so since the Rothesay case.

That BT pension overhang is more than enough to deter me from buying them, even without the threat of McDonnell and the measures he might implement requiring companies to plug their funding gaps at the expense of dividends.
Measures with which one might objectively agree, subject of course to the proviso that they be funded out of someone else's dividends, not mine

V8

Each to their own, of course, but the Pension "issue" is one of the main attractions of this share to me.

Interestingly only a couple of weeks ago we got the interim results and update from BT covering the period March 19 to Sept 19. I would say the FTSE (as an equity market proxy) was broadly unchanged over that period. The pension deficit, as measured on a IAS19 basis, fell from £6.0bn to £5bn.

[Arborbridge]

As of a year ago, BT had the greatest pension liability of any UK Co, relative to its market value.

Given that funding gaps such as this will get a lot worse when the market falls, companies will be keen to offload those liabilities, so it might be more logical to buy Phoenix, or perhaps Chesnara although less so since the Rothesay case.

That BT pension overhang is more than enough to deter me from buying them, even without the threat of McDonnell and the measures he might implement requiring companies to plug their funding gaps at the expense of dividends.
Measures with which one might objectively agree, subject of course to the proviso that they be funded out of someone else's dividends, not mine

V8

The elephant in the room of nationalisation is the pension liability. We could well end up with a disproportionate chunk of the liability, but lose an unfair fraction of the income stream. The government will do their worst in this respect. As for being given unwanted government bonds at book value in lieu of shares - that's hardly better than a banana republic, utterly reprehensible.

Arb.