Half-year results from BT Group PLC (LSE:BT.A) on Thursday 2 November are not expected by City analysts to be anything to call home about, as indicated by the shares trading only slightly above decade lows seen in the pandemic, but there could be some positive surprises.
"We think Q2 results will be mixed and concerns remain," said UBS, worrying about losses at Openreach, as well as several background industry tectonics.
BT also has "a number of additional overhangs" that the Swiss bank sees as likely to constrain the shares in the near-term, including the risks of another dividend cut when a replacement for CEO Philip Jansen arrives in January, the triennial pension review due by May, risks about Virgin Media O2 revisiting a deal for TalkTalk, the UK general election at some point next year and associated uncertainty on whether the Labour Party will remove mid-contract price rises and indexation at Openreach.
But those are not issues for the coming week, when the analyst consensus expects second-quarter revenue growth of 1.6% to €5.23 billion, down from 3.7% in the preceding quarter, and 1.7% growth in EBITDA to €2.0 billion.
One potential upside could be recent broadband price rises landing better than expected, UBS said, leading to upside risk to near-term financials.
Full-year guidance is expected to be reiterated of “growing” revenues and EBITDA, with the consensus looking for a 1.7% increase for both to £20.79 billion and £8.14 billion respectively, along with "normalised" free cash flow of £1.0-1.2 billion.