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A decent year for BT

Article By: ,  Financial Analyst
May 9, 2014 5:47 PM

Telecoms heavyweight, BT, garnered some positive reaction yesterday (8th May) following the release of its latest market update.

For its full-year ended 31st March, BT reported group revenue of £18.3bn and EBITDA of some £6.1bn.  Both were flat versus the prior year but it marks a turn from revenue declines posted by BT over recent years.

The company’s full-year results were certainly helped by decent performance in the fourth quarter, thanks predominantly to its Consumer division.

Indeed, on a divisional basis, BT’s Consumer business was the standout performer in the quarter: revenue was up 9% at some £1.1bn and EBITDA grew 5%, coming in at £216m.

The strong performance in that division – which contrasts to declines across the rest of BT’s businesses – was thanks mainly to the company’s recent investments.

BT’s investments

Following something of a difficult time over the last few years, BT embarked on cost control measures to help support margins, as the company looked to chase growth by making a series of investments.

Those investments included pushing ahead with its fibre optic network rollout, as well as foraying into sports television (BT Sport).

That’s seemingly bearing fruit, with the company’s retail fibre optic broadband customers now over 2 million and BT Sport now claiming some 3 million direct customers (5 million including wholesale).

BT’s shares

In addition, BT set about keeping shareholders sweet with a 15% hike in full-year dividend, together with the promise to increase dividend by 10%-15% for each of the next two years.

All of that helped inch the company’s shares up around 3% (slightly down today), bringing the total ascent since lows last month to around 9%.  That’s still some 7% off this year’s peak in February.

That said, elusive top-line growth in the company’s other businesses remains – that’s aside from the widely-discussed concerns over BT’s notable pension deficit (£5.6bn net of tax), which could pressure the company.

Still, the company’s latest results show that it’s heading in the right direction.

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