BT Group Plc Final Results for the Fourth Quarter and Year to 31 March 2010 and Announcement of Future Plans

News provided by

BT

May 13, 2010, 11:08 ET

LONDON, May 13 /PRNewswire-FirstCall/ -- BT Group plc (BT.L) today announces its results for the fourth quarter and year to 31 March 2010. The company is also holding an Investor Day today at which it will provide an update on its business and future plans. All material information is contained in this announcement.

Ian Livingston, Chief Executive, commenting, said:

"We have made good progress this year and have now set clear objectives for the next three years.

"We have improved customer service, are transforming the cost base and have more than doubled free cash flow, but there is still a lot more to do.

"We are investing in the future of our business, enhancing our TV offering and building on opportunities in our Global Services business. Assuming an acceptable environment for investment, we see the potential to roll out fibre to around two-thirds of the UK by 2015. This will take our total fibre investment to 2.5bn pounds Sterling which will be managed within our current levels of capital expenditure.

"During the next three year period we expect to improve our underlying revenue trends, and grow EBITDA and free cash flow, while investing in the business, supporting the pension fund, reducing net debt and paying progressive dividends.

"We are on track with our goal of creating a better business with a better future."

Fourth quarter and full year results:

Fourth quarter to 31 March 2010

Year to 31 March 2010

m pounds

Change %

m pounds

Change %

Adjusted revenue(1)

5,356

(3)

20,911

(2)

Adjusted EBITDA(1)

1,530

16

5,781

6

Adjusted earnings per share(1)

               5.2p  

73

           18.6p

16

Reported earnings per share

               2.7p

n/m

           13.3p

n/m

Free cash flow(3)

1,045

(8)

1,933

162

Net debt(4)



9,283

(10)

Proposed full year dividend



             6.9p

6

Key points:

  • Full year results ahead of our outlook for the year
  • Revenue down 2% in the year, ahead of expectations
  • Total underlying cost reductions(2) of 1,752m pounds in the year
  • Capital expenditure reduced by 18% in the year to 2.5bn pounds
  • Free cash flow(3) of 1.9bn pounds, an improvement of 1.2bn pounds over last year
  • Net debt reduced by over 1bn pounds in the year
  • Proposed final dividend of 4.6p, giving 6.9p for the full year

2010/11 Outlook:

* Revenue

c.20bn pounds

* Operating cost savings(5)

c.900m pounds

* Adjusted EBITDA(6) after leaver costs

in line with 2009/10

* Free cash flow before specific items(7)

c.1.8bn pounds

* Net debt

below 9bn pounds


Future financial outlook:

  • Expect improving underlying revenue trends from 2010/11 to 2012/13, with growth in 2012/13
  • Expect adjusted EBITDA(6) after leaver costs to grow from 2010/11 to 2012/13
  • Expect free cash flow before specific items(7) to reach around 2bn pounds by 2012/13
  • BT Global Services operating cash flow expected to show further significant improvement in 2010/11 and turn positive in 2011/12
  • Progressive dividends over the next three years

Future investment plans:

  • Plans to invest a further 1bn pounds (2.5bn pounds in total) to extend the roll out of fibre to around two-thirds of UK premises by 2015, dependent on acceptable investment environment. This expenditure will be managed within our current levels of capital expenditure of around 2.6bn pounds
  • Within our adjusted EBITDA(6) outlook for 2010/11, additional investment of around 200m pounds mainly in fibre, new consumer propositions and expansion in the Asia Pacific region

(1)  Before specific items, leaver costs, net interest on pensions and BT Global Services contract and financial review charges in 2008/09. Adjusted revenue is stated before specific items and BT Global Services contract and financial review charges in 2008/09

(2)  Underlying operating costs and capital expenditure, before specific items, leaver costs and BT Global Services contract and financial review charges in 2008/09

(3)  Before pension deficit payment of nil pounds in Q4 2009/10 (Q4 2008/09: nil pounds) and 525m pounds in FY 2009/10 (FY 2008/09: nil pounds), but after the cash costs of BT Global Services restructuring

(4)  Net debt is reconciled in Note 8

(5)  Underlying operating costs before specific items, depreciation and amortisation

(6)  Before specific items

(7)  Before pension deficit payment. Specific items are expected to result in a cash outflow of around 150m pounds in 2010/11

Group results

Fourth quarter to 31 March

Year to 31 March


2010

2009(1)

Change

2010

2009(1) 

Change

m pounds

m pounds

%

m pounds

m pounds

%

Revenue










- adjusted (2)

5,356

5,514

(3)

20,911

21,431

(2)

- reported

5,356

5,473

(2)

20,859

21,390

(2)

EBITDA










- adjusted (2)

1,530

1,317

16

5,781

5,442

6

- reported

1,341

(391)

n/m

5,162

3,191

62

Operating profit (loss)










- adjusted(2)

742

526

41

2,742

2,552

7

- reported

553

(1,182)

n/m

2,123

301

n/m

Profit (loss) before tax










- adjusted (3)

523

314

67

1,877

1,658

13

- reported

251

(1,316)

n/m

1,007

(244)

n/m

Earnings (loss) per share










- adjusted (3)

5.2p

3.0p

73

18.6p

16.0p

16

- reported

 2.7p

(13.1)p

n/m

13.3p

 (2.5)p

n/m

Full year proposed dividend





6.9p

6.5p

6

Capital expenditure

862


758


14


2,533


3,088


(18)

Free cash flow (4)

1,045


1,134


(8)

1,933


737


162

Net debt (5)





9,283


10,361


(10)

SOURCE BT

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