Blueprint
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Date of
Announcement: 27 October
2016
BT Group plc
(Translation
of registrant's name into English)
BT
Group plc
81 Newgate
Street
London
EC1A 7AJ
England
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F..X...
Form 40-F.....
Indicate
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes
......
No ..X..
If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
________
27
October 2016
BT
GROUP PLC
RESULTS FOR THE SECOND QUARTER TO 30 SEPTEMBER 2016
BT
Group plc (BT.L) today announced its results for the second quarter
and half year to 30 September 2016.
Financial
highlights for the quarter:
●
Reported revenue up
35%, and growth in underlying revenue1 excluding transit
adjusted for the acquisition of EE up 1.1%
●
Reported earnings
per share down 10%, adjusted2 earnings per share
up 4%
●
Underlying
EBITDA1
adjusted for the acquisition of EE up 0.9%
●
Non-cash specific
item charge of £145m following initial investigation into
inappropriate management behaviour in BT Italia
●
Net cash inflow
from operating activities of £1,734m, up £489m and
normalised free cash flow3 of £894m, up
£325m reflects timing of receipts and payments within the
year; net debt £9,573m
●
Interim dividend
4.85p, up 10%
Operational
highlights for the quarter:
●
Mobile pay monthly
net additions of 280,000, with sustained low churn
●
65% retail share of
total broadband net additions at 76,000, with retail fibre
broadband net additions at 216,000
●
Openreach achieved
440,000 fibre broadband net additions, including >50% from
external service providers for first time
●
Over 1,000 new
UK-based customer service roles in Consumer in the second half to
answer 90% of calls in the UK
●
Good progress
clearing long tail of outstanding Ethernet orders in
Openreach
●
Openreach ahead on
all 60 minimum service levels and on track to halve missed
appointments this year
Gavin
Patterson, Chief Executive, commenting on the results,
said:
“This is a
positive set of results, both operationally and financially, and we
remain on track to achieve our full year outlook. We’ve made
good progress on the integration of EE and the delivery of our
synergy targets. Our consumer facing lines of business have
performed well, but in the enterprise space, UK public sector
continues to be a challenging market. Across the group, we continue
to drive cost reduction and productivity improvements. Customer
experience remains a key priority, and we’re stepping up our
investments in the second half of the year. And we’ll
continue to invest in our ultrafast and 4G plans in 2017 and
beyond. Ofcom’s consultation on the Digital Communications
Review closed earlier this month; we’ve submitted our
response and will continue to engage with Ofcom to reach the best
outcome for the UK.”
|
|
|
Second quarter to
30 September 2016
|
Half year to
30 September 2016
|
|
|
|
£m
|
Change4
|
£m
|
Change4
|
|
Reported
measures
|
|
|
|
|
|
|
Revenue
|
|
6,007
|
35%
|
11,782
|
34%
|
|
Profit
before tax
|
|
671
|
5%
|
1,388
|
9%
|
|
Basic
earnings per share
|
|
5.7p
|
(10)%
|
11.6p
|
(6)%
|
|
Interim
dividend
|
|
|
4.85p
|
10%
|
|
|
|
|
|
|
|
Adjusted
measures
|
|
|
|
|
|
Change
in underlying revenue1 excluding
transit
adjusted
for the acquisition of EE
|
|
1.1%
|
|
0.8%
|
|
Adjusted2
EBITDA
|
|
1,888
|
31%
|
3,706
|
28%
|
|
Change
in underlying EBITDA1
adjusted
for the acquisition of EE
|
|
|
0.9%
|
|
(0.4)%
|
|
Adjusted2
profit before tax
|
|
873
|
24%
|
1,675
|
20%
|
|
Adjusted2
basic earnings per share
|
|
7.2p
|
4%
|
13.8p
|
1%
|
|
Normalised
free cash flow3
|
894
|
£325m
|
1,342
|
£667m
|
|
Net
debt
|
|
|
|
9,573
|
£3,654m
|
1 Excludes specific
items, foreign exchange movements and disposals and is calculated
as though EE had been part of the group from 1 April 2015.
This differs from
how
we usually adjust for acquisitions as explained on page
3
2 Before specific items, which are defined on page
3
3 Before specific items, pension deficit payments and the
cash tax benefit of pension deficit payments
4 The results for the period
include EE which we acquired on 29 January 2016. Unless referred to
as underlying adjusted for the acquisition of EE, comparatives do
not
include EE
GROUP RESULTS FOR THE SECOND QUARTER AND HALF YEAR TO 30 SEPTEMBER
2016
|
|
Second quarter
to 30 September
|
Half year
to 30 September
|
|
|
2016
|
2015
|
Change1
|
2016
|
2015
|
Change1
|
|
|
£m
|
£m
|
%
|
£m
|
£m
|
%
|
|
Revenue
|
|
|
|
|
|
|
|
- reported
|
6,007
|
4,459
|
35
|
11,782
|
8,819
|
34
|
|
- adjusted2
|
6,053
|
4,381
|
38
|
11,828
|
8,659
|
37
|
|
- change in underlying revenue3
excluding transit
adjusted for the acquisition of EE
|
|
|
1.1
|
|
|
0.8
|
|
EBITDA
|
|
|
|
|
|
|
|
- reported
|
1,739
|
1,436
|
21
|
3,524
|
2,878
|
22
|
|
- adjusted2
|
1,888
|
1,442
|
31
|
3,706
|
2,891
|
28
|
|
- change in underlying EBITDA3
adjusted for the acquisition of EE
|
|
|
0.9
|
|
|
(0.4)
|
|
Operating profit
|
|
|
|
|
|
|
|
- reported
|
870
|
813
|
7
|
1,800
|
1,627
|
11
|
|
- adjusted2
|
1,019
|
819
|
24
|
1,982
|
1,640
|
21
|
|
Profit before tax
|
|
|
|
|
|
|
|
- reported
|
671
|
642
|
5
|
1,388
|
1,274
|
9
|
|
- adjusted2
|
873
|
706
|
24
|
1,675
|
1,400
|
20
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
- reported
|
5.7p
|
6.3p
|
(10)
|
11.6p
|
12.4p
|
(6)
|
|
- adjusted2
|
7.2p
|
6.9p
|
4
|
13.8p
|
13.6p
|
1
|
|
Interim dividend
|
|
|
|
4.85p
|
4.40p
|
10
|
|
Capital expenditure
|
802
|
629
|
28
|
1,579
|
1,287
|
23
|
|
Normalised free cash flow4
|
894
|
569
|
57
|
1,342
|
675
|
99
|
|
Net debt
|
|
|
|
9,573
|
5,919
|
£3,654m
|
Line
of business results2
|
|
Revenue
|
EBITDA
|
Free cash flow4
|
|
Second
quarter to
|
2016
|
20155
|
Change
|
2016
|
20155
|
Change
|
2016
|
20155
|
Change
|
|
30
September
|
£m
|
£m
|
%
|
£m
|
£m
|
%
|
£m
|
£m
|
%
|
|
Consumer
|
1,251
|
1,129
|
11
|
252
|
205
|
23
|
90
|
56
|
61
|
|
EE
|
1,277
|
-
|
n/m
|
282
|
-
|
n/m
|
135
|
-
|
n/m
|
|
Business and Public
Sector
|
1,177
|
1,026
|
15
|
387
|
321
|
21
|
306
|
254
|
20
|
|
Global
Services
|
1,409
|
1,212
|
16
|
132
|
113
|
17
|
58
|
35
|
66
|
|
Wholesale and
Ventures
|
522
|
575
|
(9)
|
204
|
175
|
17
|
155
|
108
|
44
|
|
Openreach
|
1,273
|
1,267
|
0
|
630
|
646
|
(2)
|
456
|
327
|
39
|
|
Other
|
1
|
0
|
100
|
1
|
(18)
|
(106)
|
(306)
|
(211)
|
45
|
|
Intra-group
items
|
(857)
|
(828)
|
3
|
0
|
0
|
n/m
|
0
|
0
|
n/m
|
|
Total
|
6,053
|
4,381
|
38
|
1,888
|
1,442
|
31
|
894
|
569
|
57
|
1 The results for the
period include EE which we acquired on 29 January 2016. Unless
referred to as underlying adjusted for the acquisition of EE,
comparatives do not
include
EE
2 Before specific items, which are defined on page
3
3 Excludes specific
items, foreign exchange movements and disposals and is calculated
as though EE had been part of the group from 1 April 2015.
This differs from
how
we usually adjust for acquisitions as explained on page
3
4 Before specific items, pension deficit payments and the
cash tax benefit of pension deficit payments
5 Certain line of business results have been restated. See
Note 1 to the condensed consolidated financial
statements
n/m
= not meaningful
Notes:
1.
Our commentary
focuses on the trading results on an adjusted basis, which is a
non-GAAP measure, being before specific items. Unless otherwise
stated, revenue, operating costs, earnings before interest, tax,
depreciation and amortisation (EBITDA), operating profit, profit
before tax, net finance expense, earnings per share (EPS) and
normalised free cash flow are measured before specific items. This
is consistent with the way that financial performance is measured
by management and reported to the Board and the Operating Committee
and assists in providing a meaningful analysis of the trading
results of the group. The directors believe that presentation of
the group’s results in this way is relevant to the
understanding of the group’s financial performance as
specific items are those that in management’s judgement need
to be disclosed by virtue of their size, nature or incidence. In
determining whether an event or transaction is specific, management
considers quantitative as well as qualitative factors such as the
frequency or predictability of occurrence. Specific items may not
be comparable with similarly titled measures used by other
companies. Reported revenue, reported operating costs, reported
operating profit, reported profit before tax, reported net finance
expense and reported EPS are the equivalent unadjusted or statutory
measures. Reconciliations of reported to adjusted revenue,
operating costs and operating profit are set out in the Group
income statement. Reconciliations of underlying revenue excluding
transit adjusted for the acquisition of EE, underlying operating
costs excluding transit adjusted for the acquisition of EE, EBITDA,
underlying EBITDA adjusted for the acquisition of EE, net debt and
free cash flow to the nearest measures prepared in accordance with
IFRS are provided in the notes to the condensed consolidated
financial statements and in the Additional
information.
2.
Trends in
underlying revenue excluding transit adjusted for the acquisition
of EE, underlying operating costs excluding transit adjusted for
the acquisition of EE, and underlying EBITDA adjusted for the
acquisition of EE are non-GAAP measures which seek to reflect the
underlying performance of the group that will contribute to
long-term sustainable growth and as such exclude the impact of
acquisitions and disposals, foreign exchange movements and any
specific items. We exclude transit from the trends as transit
traffic is low-margin and is affected by reductions in mobile
termination rates. Given the significance of the EE acquisition to
the group, in 2016/17 we are calculating underlying revenue
excluding transit adjusted for the acquisition of EE, underlying
operating costs excluding transit adjusted for the acquisition of
EE and underlying EBITDA adjusted for the acquisition of EE (see
note 3), as though EE had been part of the group from 1 April 2015.
This is different from how we usually adjust for acquisitions, and
is the basis for our 2016/17 outlook.
3.
We have prepared
and published historical financial information adjusted for the
acquisition of EE (previously described as pro forma historical
financial information) for the eight quarters ended 31 March 2016
for the group and by line of business under our new organisational
structure, to illustrate the results as though EE had been part of
the group from 1 April 2014. This historical financial information
adjusted for the acquisition of EE shows EE’s historical
results adjusted to reflect BT’s accounting policies. In the
consolidated group total, we’ve eliminated historical
transactions between BT and EE as though they had been intercompany
transactions. We’ve not made any adjustments to reflect the
allocation of the purchase price for EE. And all deal and
acquisition-related costs have been treated as specific items and
therefore don’t impact the published
information.
Enquiries
|
Press
office:
|
|
|
Ross
Cook
|
Tel:
020 7356 5369
|
|
|
|
|
Investor
relations:
|
|
|
Carl
Murdock-Smith
|
Tel:
020 7356 4909
|
We will
hold the second quarter and half year 2016/17 results presentation
for analysts and investors in London at 9.00am today and a
simultaneous webcast will be available at www.bt.com/results
We are
scheduled to announce the third quarter results for 2016/17 on
Friday 27 January 2017.
About BT
BT’s
purpose is to use the power of communications to make a better
world. It is one of the world’s leading providers of
communications services and solutions, serving customers in 180
countries. Its principal activities include the provision of
networked IT services globally; local, national and international
telecommunications services to its customers for use at home, at
work and on the move; broadband, TV and internet products and
services; and converged fixed-mobile products and services. BT
consists of six customer-facing lines of business: Consumer, EE,
Business and Public Sector, Global Services, Wholesale and
Ventures, and Openreach.
For the
year ended 31 March 2016, BT Group’s reported revenue was
£19,042m with reported profit before taxation of
£3,029m.
British
Telecommunications plc (BT) is a wholly-owned subsidiary of BT
Group plc and encompasses virtually all businesses and assets of
the BT Group. BT Group plc is listed on stock exchanges in London
and New York.
For
more information, visit www.btplc.com
Click
on, or paste the following link into your web browser, to view the
associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/5689N_-2016-10-26.pdf
Signatures
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BT Group plc
(Registrant)
By: /s/
Dan Fitz, Company Secretary
--------------------
Dan
Fitz, Company Secretary.
Date
27 October 2016