BT Group Finals
Posted: May 13th, 2021, 7:14 am
Key strategic developments:
• Ofcom's WFTMR1, outcome of recent spectrum auction and Government's tax super-deduction allows us to increase and accelerate our FTTP build from 20m to 25m premises by December 2026; BT to explore potential joint venture for additional 5m build - see separate press release
• Agreed triennial pension deficit of £7.98bn and deficit recovery plan comprising: asset-backed funding over 13 years (£180m p.a.) secured against the EE business; and further payments over 10 years (£900m p.a. reducing to £600m p.a. from 1 July 2024) - see separate press release
• Secured 80MHz of 5G spectrum for a total of £475m in Ofcom's auction allowing us to build on our position as the UK's number one 5G network
• Significant UK cash tax benefit in 2021/22 and 2022/23, as a large proportion of our capital expenditure is expected to qualify for the proposed 130% tax super-deduction
Strong operational performance during the Covid-19 pandemic:
• Strong network performance; BT's broadband networks seamlessly managed a doubling of daytime traffic due to more people being at home during the day; 42% increase in EE mobile data usage over the last 12 months
• Group NPS2 increased by 7.8 points compared to the prior year baseline, a 19th successive quarter of growth
• Openreach achieved 2.0m in year FTTP build with record build levels in Q4; increased FTTP connections by 73% to 905k over the last 12 months
• 5G footprint doubled to 160 locations and 5G ready customer base now over 3.2m; EE named the Fastest Mobile Network by Uswitch in February 2021
• Tracking ahead on our modernisation plans; delivered gross annualised savings of £764m within the first year of our three-year modernisation programme with an associated cost of £438m
Financials delivered in line with guidance primarily impacted by Covid-19:
• Revenue £21,331m, down 7%, primarily due to the impact of Covid-19 on Consumer and our enterprise units, ongoing legacy product declines and divestments, partly offset by higher equipment revenue and Openreach bases in fibre and Ethernet; adjusted2 revenue down 6% in line with expectation
• Adjusted2 EBITDA £7,415m, down 6% as expected, primarily due to the fall in revenue, special frontline bonus, increased service costs and continued investment in copper-to-fibre migrations and our FTTP base, partly offset by sports rights rebates and cost savings including our modernisation programme, tight cost control, and Covid-19 mitigation actions
• Reported profit before tax £1,804m, down 23%, primarily due to reduced EBITDA
• Net cash inflow from operating activities £5,963m; normalised free cash flow2 £1,459m, down 27%, primarily due to reduced EBITDA, higher cash capital expenditure and adverse working capital, offset by a cash receipt from the monetisation of a non-strategic revenue stream generated from our building infrastructure and timing of tax payments
• Capital expenditure £4,216m, up 6%, primarily due to increased network and equipment investment
• As previously disclosed, no final dividend for 2020/21, but payments expected to resume at an annual rate of 7.7p per share in 2021/22
• Outlook for 2021/22: adjusted2 revenue to be broadly flat year on year; adjusted2 EBITDA between £7.5bn-£7.7bn; capital expenditure c.£4.9bn; normalised free cash flow between £1.1bn-£1.3bn.
https://www.investegate.co.uk/bt-group- ... 00064783Y/