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BT forecasts "modest" earnings growth in 2015 as Q1 profits rise

Published: 08:45 30 Jul 2015 BST

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BT increased TV customers by 60,000 to 1.2 million

Telecoms group BT (LON:BT.A) reported a good start for its mobile arm as it posted higher first quarter profits.

BT, which is buying mobile operator EE, signed up more than 100,000 consumer mobile customers in the first three months of the year.

The group went back into the mobile market in March after leaving it when it sold the former UK Cellnet business over a decade ago.

It said the proposed acquisition of EE was moving forward and it expected approval of the merger by March next year.

Adjusted pre-tax profit in the three months to June 30 rose 9% to £694mln on a 2% fall in revenue to £4.3bn.

The company increased BT TV customer numbers by 60,000, taking its total to 1.2 million, which it said was its best performance since launching its BT Sport channels.

Elsewhere in its consumer division, revenue was up 3%, with a 7% increase in broadband and TV revenue.

Call and line revenue was broadly flat. Consumer average revenue per user increased 5% to £419 driven mainly by broadband, including the effect of people moving to fibre.

BT added 85,000 retail broadband customers, representing 57% of DSL and fibre broadband market net additions.

Superfast fibre broadband growth continued with 217,000 retail net additions, taking customer numbers to 3.2 million.

The company's superfast fibre broadband network now reaches around 80% of all UK premises and is expected to reach 95% by the end of 2017.

Technical trials of ultrafast broadband using G.fast were progressing well and BT was on target to start large-scale customer trials this summer.

The group said its outlook was unchanged and it continued to expect growth in underlying revenue in 2015/16 with modest growth in adjusted EBITDA (underlying earnings).

It plans to increase its dividend per share by 10%-15% and to undertake a share buyback of around £300mln.

Revenue and profit at BT's worldwide business division Global Services fell due to a decline in public sector revenue in the UK and foreign exchange costs, but in mainland Europe it rose 2%.

Chief executive Gavin Patterson said: “The investments we are making in our business and customer service are building a strong platform for growth, and our financial results show we’re on track to achieve our outlook for the full year.”

Shares fell 11.3p to 462.2p.

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