BT Group PLC (LSE:BT.A) is facing a difficult first half of the year, according to Citi, as last year’s bumper price rises wash through.
A first quarter update is due on 25 July and this is also likely to show average per user (ARPU) under pressure, suggests the US bank.
Add in higher salary inflation and BT might report a 4% year-on-year decline in underlying profits [EBITDA] for quarter one.
“We, however, expect the EBITDA trend to recover in the second half as comps get easier and the cost efficiency program starts to contribute.
“Aside from the shift in top-line/EBITDA trends, we also expect a modest quarter-on-quarter deterioration in Openreach's line losses given muted market growth and increased competition as Altnets targeting higher network penetration.
“For the shares, we continue to consider long-term attractiveness (esp on Openreach value).
Shares eased 2.6% to 137.4p.