BT Group (LSE: BT-A) (NYSE: BT.US) is due to announce its half-year results on Thursday next week (31 October).
Shares in the telecoms company have out-performed the FTSE 100 over the past six months, having risen 28% compared with a 4% rise for the index.
How will BT’s business have performed in the first half compared with last year? And is the group on track to meet forecasts for this year’s key full-year numbers? Here’s your cut-out-and-check table!
| H1 2012/13 | FY 2012/13 | Forecast H1 2013/14 | Forecast H1 growth | Forecast FY 2013/14 | Forecast FY growth | |
|---|---|---|---|---|---|---|
| Revenue (£bn) | 8.96 | 18.25 | 8.89 | -0.8% | 18.08 | -1.0% |
| Pre-tax profit (£bn) | 1.19 | 2.69 | 1.15 | -3.4% | 2.65 | -1.8% |
| Earnings per share (EPS) | 11.7p | 26.6p | 11.3p | -3.4% | 26.6p | 0.0% |
| Dividend per share | 3.0p | Final: 6.5p, Total: 9.50p |
3.4p | +13.3% | 10.9p | +14.7% |
Revenue, pre-tax profit and EPS are all before ‘specific items’ (a.k.a. exceptional items)
Source: Company reports and corporate website
Admirably, BT publishes analyst consensus forecasts on its corporate website. As such, investors have a definitive picture of what the company considers to be market expectations.
Before getting down to the nitty gritty, I should mention that even if BT were to hit next week’s forecast numbers bang on, the percentage growth figures are likely to be a little different to those in the table, because the company will be restating last year’s H1 due to a change in accounting rules.
Revenue, profit and EPS
Analysts are forecasting revenue to be modestly down for H1 (-0.8%) — look for £8.89bn next week — with no improvement to come in H2. Pre-tax profit (£1.15bn) and EPS (11.3p) are expected to see a larger fall (-3.4%) than revenue for H1, but with improvement expected in H2 to leave full-year profit down 1.8% and EPS flat.
Despite the tremendous rise in BT’s share price over the past six months, forecasts are for a no-growth year. So why have investors been so keen on the shares?
Dividend
BT announced a new dividend policy at the end of its 2011/12 financial year for annual dividend growth of 10-15% for the following three years. The board delighted shareholders by lifting the 2012/13 dividend at the top end of the range — namely 14.5% — when announcing its annual results on 10 May.
Analysts are now expecting BT to continue delivering dividend growth at the higher level. Look out for an interim dividend of 3.4p — up +13.3% on last year’s interim — in next week’s results.
BT Sport
The progress on BT’s move into sport TV has also excited shareholders over the past six months. On 25 July, within its Q1 results, BT told us more than half a million households had ordered BT Sport ahead of launch. Three weeks later the company was informing the market that the number of households had passed a million; and three days after came news of a deal with Virgin Media “that increases the audience for BT Sport to around three million homes overnight”.
As two-and-a-half months have now passed with no further sport updates, shareholders should be looking for news of progress with a keen eye.
