Telecoms giant BT has revealed a fall in revenues for the last three months of 2017 as higher business rates and pension charges hit.
Revenue slid three per cent in three months up to 31 December for the group, with adjusted earnings down two per cent to £1.8billion after the firm invested more into mobiles and improving customer service.
The company maintained its profit expectations for the full year, up to the end of March, despite the disappointing quarter and a nine per cent drop in profits over the financial year so far.
Falling shares: The company saw shares fall 5% after a disappointing quarter despite maintaining its expectations for the full year, due to end in March
It said revenue should remain largely flat with ‘progressive’ movement in shareholder dividend payments.
Its share price was hit by the poor results, falling more than five per cent over the morning to 242.50p and piling yet more pressure on to the group which has already seen it share value drop 16 per cent over the last year.
Richard Wilson of Interactive Investors said company performance in the year to date has been disapointing.
‘The performance in the wholesale and global services divisions remains stagnant, whilst the pension situation is a concern,’ he said.
‘Key metrics such as revenues and earnings per share remain patchy and slightly light of expectations. Whilst the performance in the third quarter is respectable, this does not mask the overall performance in the year to date, which is lagging.’
The results followed an announcement on Thursday in which BT committed itself to link three million UK homes up to its ‘Fibre First’ programme by 2020, before trying to reach the ‘majority’ of homes and businesses in the UK.
The group said it had received fewer complaints, with broadband complaints down 31 per cent and both landline and TV complaints falling 26 per cent.
Average viewing on BT Sports hit record quarterly levels, with figures up 23 per cent year-on-year.
It is an area of focus for the group’s TV arm which faces stiff competition from the likes of Sky Sports.
The two groups have struck a deal to give their respective customer base access to shared content from 2019, meaning Sky’s NOW TV service will be available on a BT subscription and BT customers can subscribe to NOW’s services.
Groundbreaking deal: BT and Sky Sports will be able to sell their channels on the others’ platforms from 2019 onwards
What is the BT ‘Fibre First’ programme?
- BT has pledged to link three million homes up to ‘ultrafast’ broadband by 2020, and 10 million by 2025
- Involves linking fibre cables directly into homes and business
- Under superfast broadband fibre cables are laid in key streets and traditional copper cabling links up to homes
- But BT wants to have the ‘majority’ of houses and business linked directly with ultrafast fibre cables to improve internet connection speeds
- The change would increase speeds from the current 24 megabits to 100 megabits
However there could be yet more competition on the horizon if internet companies throw their hats into the sports ring, Hargreaves Lansdown analyst Laith Khalaf says.
‘The triennial Premier League TV rights auction is upon us once again, and the eye-watering amounts of money paid for players reflects in part the gargantuan sums that BT and Sky plough into securing televised games for their sports channels.
‘The fear is that Amazon and Facebook may throw their hats in the ring this time around, inflating the cost of rights beyond the £5 billion Sky and BT forked out last time. A bigger spend wouldn’t be good for shareholders, or customers for that matter, though the footballers will be chuckling all the way to the bank,’ Khalaf said.
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