BT Group plc Returns To Growth


The shares of BT (LSE: BT-A) (NYSE: BT.US) added 13p to 384p during early trade this morning after the phone company announced a return to growth for the first time in four and a half years, boosted by strong performance in emerging markets and increased broadband demand. The stock has risen almost 50% over the last 12 months.

Demand was helped by interest in BT Sport, which customers get for free packaged with their broadband subscription, and from 2015 the UEFA Champions League will be broadcast on the channel. 

The 168-year-old company revealed that revenue was up 2% to £4.6 billion during October, November and December, slightly ahead of analysts’ expectations.

During the same period net-profit rose to a little under £500 million, smashing market expectations that were around £100 million less than the total figure.

The FTSE 100 member added that it expects operating profit will be around £6 billion, which is within the range expected.

Gavin Patterson, the chief executive, commented:

“Our strategic investments are delivering. It was another record quarter for fibre take-up and there are now more than 18 million premises with access to our fibre. That number will grow further as the BDUK programme progresses.

“Fibre helps SMEs to compete and underpins our TV plans. Our direct BT Sport customer base passed 2.5 million in the quarter and helped to support 6% revenue growth in our Consumer business. We achieved some particularly strong audience figures in December and the exclusive rights to the UEFA Champions League and UEFA Europa League that we have won will further strengthen the appeal of our proposition.”

Prior to today City experts were predicting BT’s annual results to show earnings equivalent to 28p per share, and a dividend equivalent to around 9p per share.

Following this morning’s price movement the shares may therefore trade on a P/E of 14 and offer a potential income of 2%.

The decision to ‘buy’ — based on those ratings, today’s results and the wider prospects for the telecoms sector — is solely your decision.

If you already own shares in BT and are seeking alternative blue-chip investments, this exclusive wealth report is for you. It features in depth reports on five 'must own' stocks for 2014 and beyond.

We call it "The Fool's Five Shares To Retire On", which features essential views from our experts.

Don't delay! The report won't be around forever -- click here for your FREE copy.

Mark doesn't own shares in BT.