BT’s share price rises after it reports adjusted pre-tax profits rise 15 per cent for the first half of the year as new customers are added
BT added a record number of television customers in the second quarter, reporting a 15 per cent rise in adjusted pre-tax profits for the first half. BT's share price rose 0.8 per cent in early trading on the news.
The figures
BT reported adjusted profit before tax of £642m for the three months to the end of September, a 14 per cent increase on last year. In the first half, adjusted profit before tax was £1.27bn, a 15 per cent increase on last year.
Meanwhile, revenue for the quarter was flat at £4.38bn. In the first half, the figure fell one per cent to £8.66bn.
Net debt for the first half was £5.92bn, while interim dividend rose 13 per cent to 4.4p.
Why it's interesting
BT pulled in a record number – 106,000 – of new television customers in the quarter, helping the company to outdo analysts' forecasts.
The new customers allowed the company pushed up the revenue of its consumer unit by by seven per cent to £1.13bn for the quarter, driven by increased demand in BT Sport.
Analysts had forecast a drop in revenue to £4.33bn, but BT topped expectations by reporting £4.38bn.
Read more: BT-EE merger a step closer with "provisional" thumbs up
Yesterday UK's competition authority provisionally approved BT's £12.5bn offer to by EE, the mobile network. The deal, sealed in February, will combine BT’s more than 10m retail customers and EE’s 24.5m mobile subscribers, and will be funded through a £1bn share issue and £2.4bn of new debt.
Read more: Broadband fight kicks off after BT pledges reforms
The company said it was "pleased that yesterday, the Competition and Markets Authority provisionally approved our planned acquisition of EE, unconditionally without remedies".
BT said it is on track to achieve its outlook for the year as its strategy is delivering.
What BT said
Gavin Patterson, chief executive, said:
We want to get fibre broadband to as many people as possible and we are also pushing ahead with our plans to get ultrafast broadband to 10 million premises by the end of 2020. Market-wide demand for fibre remains strong with fibre net additions up 21 per cent as we hit the five million milestone for homes and businesses connected.
Mobile is another growth area and I am pleased our consumer customer base now stands at more than 200,000.
We are making step changes to improve customer service, as part of our group-wide programme. Openreach recently launched 'View my Engineer' service is going down well. . We have also created more than 1,000 new contact centre jobs in the UK, with hundreds more to come, to meet our 2016 commitment for more than 80 per cent of consumer customer calls to be answered in the UK. And we have plans to go even further in years to come.
In short
BT has increased its dividend on the back of strong results, driven by the consumer division, and remains on-track to meet outlook for the year.