Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Deutsche Bank expects BT Group’s first-quarter update to be “uneventful”, with consumer KPIs no longer a focus

The German bank’s analysts noted that the combination of a change in business unit reporting, IFRS15 accounting, and a less prescriptive consensus gathering process, means a wider spread than normal in expectations for BT’s first quarter 2018/19 results
BT boss Gavin Patterson
However, they added, new, lower guidance announced in May probably de-risks the Q1 results print somewhat

Deutsche Bank expects BT Group plc’s (LON:BT.A) first-quarter update due on July 27 to be “uneventful”, with consumer key performance indicators (KPIs) no longer a focus.

In a note to clients, the German bank’s analysts noted that the combination of a change in business unit reporting, IFRS15 accounting, and a less prescriptive consensus gathering process, means a wider spread than normal in expectations for BT’s first quarter 2018/19 results.

READ: BT Group close to appointing advisers for sale-and-leaseback deal for its London headquarters

However, they added, new, lower guidance announced in May probably de-risks the Q1 results print somewhat, as will BT's new KPI reporting which is designed to draw attention away from subscriber volume based metrics and towards value generated per customer.

The analysts pointed out: “This focus is a logical one for BT which, with its new convergent plans, is focussing on the less price sensitive and quality focussed end of the UK market - just as well, because in Q4, BT's broadband net adds barely grew and the prognosis for volumes is less healthy than that of revenue growth overall.”

Deutsche Bank reiterated a ‘hold’ rating on BT shares.

BT announced back in May that it would axe approximately 13,000, mainly middle-management jobs over the next three years and move its headquarters out of central London s part of its restructuring plans to cut £1.5bn of costs within three years.

The telecoms giant’s chief executive Gavin Patterson – who revealed in June that he would be stepping down later this year - said that the restructuring, which comes after a tough 2017 including an accounting scandal in Italy, would focus the firm on the essential services needed by consumers and businesses.

The May strategy changes came as the group also reported its full-year results showing a 3% drop in fourth-quarter revenue to £5.967bn, just missing analysts' expectations, while core earnings rose by 1% to £2.083bn

In late afternoon trading, the FTSE 100-listed stock was 1.8% lower at 228.1p.

View full BT.A profile View Profile

BT Group PLC Timeline

Related Articles

Cyber-security
August 19 2018
BATM's Networks & Cyber division returned to growth in 2017

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use