BT Group earnings in line ahead of Champions League launch

30th Jul 2015 08:36

(ShareCast News) - As it looks excitedly ahead to its first season as the UK's sole Champions League football broadcaster, BT Group rang up a solid set of first quarter results that were close to City forecasts and left it on track to hit its full-year targets.Revenue of £4.28bn was down 2% and just 0.3% short of consensus forecasts. On an underlying level the top line was flat, an improvement on the fourth quarter of the previous year.Almost every division disappointed analysts' expectations, with only BT Wholesale ahead of consensus thanks in part to a non-recurring £15m benefit from ladder pricing revenue.The telecoms group did however lift earnings before interest, tax, depreciation and amortisation by 1% to £1.45bn - bang in line with forecasts.Profit before tax was up 9% to £694m at the adjusted level, or 16% reported, with adjusted earnings per share up 3% to 6.7p.Although free cash flow was down 13% to £106m, net debt was down by a significant 18% to £5.8bn."This is an exciting time at BT," said chief executive Gavin Patterson. "We continue to invest heavily in our superfast fibre broadband network. It now reaches around 80% of all UK premises and we will work with government to help take fibre broadband to 95% of the country by the end of 2017."The period saw 20% uptake of superfast fibre broadband, leading the company to assume a new base-case of reaching 28% penetration.He added that technical trials of ultrafast broadband using 'G.fast' technology were progressing well, with large-scale customer trials due to start within weeks.BT, which is in the process of buying the UK's largest mobile network EE, said it own 'soft launch' of a mobile offering got off to an encouraging start with more than 100,000 consumer mobile customers signed up in the first three months.The company is due to launch its BT Sport Europe channel in the next few days, which will host its Champions League football coverage, which is free for its TV customers.But Amazon recently poached BT TV chief Alex Green to head up the online retailer's instant video offering.Nomura pointed out that while EBITDA was in line with consensus, adjusted EBITDA growth of 1% was only achieved owing to the final positive benefit from ladder pricing, which no longer continues."BT acknowledges Global Services performance as disappointing despite all the cost transformation efforts at the unit, and broadband disclosure was slightly weaker than expected across the board," the Japanese bank said in a note to clients. "We had expected Q1 to be the best quarter of the year, and with consumer now expected to see an EBITDA decline next quarter, BT has not provided much of substance to change that view. We do not expect material revisions to consensus estimates, but the prospects for positive earnings momentum ahead of EE consolidation now look somewhat muted."Shares in BT were down 2.2% to 463.26p by 08:50 on Thursday.