BT Group PLC BT.A Half Yearly Report

  BT Group PLC (BT.A) - Half Yearly Report

RNS Number : 0391Q
BT Group PLC
01 November 2012






                                                               1 November 2012

                                 BT GROUP PLC





BT Group plc  (BT.L) today announced  its results for  the second quarter  and 
half year to 30September2012.

Ian Livingston, Chief Executive, commenting on the results, said:

"We have  delivered another  solid  quarter of  growth  in profit  before  tax 
despite the economic conditions  and regulatory impacts.  We continue to  make 
significant investments  in  the future  of  our  business and  we  are  again 
accelerating our  fibre roll-out.  We  now expect  fibre  to be  available  to 
two-thirds of UK premises during spring 2014, more than 18 months ahead of our
original schedule, and we are recruiting more than 1,000 engineers in 2012  to 
help deliver this.

"Over the  summer  we  helped  to  deliver  the  most  connected  Olympic  and 
Paralympic Games ever and I am proud of the part that our people played in its

"Our confidence  in the  future of  our business  is demonstrated  by the  15% 
increase in the interim dividend."

Second quarter and half year results:

                                          Second quarter      Half year

                                          to 30 September  to 30 September
                                                 2012               2012
                                                   £m  Change       £m  Change
Revenue^1                                 4,474    (9)%    8,958    (7)%
Underlying revenue excluding transit                     (5)%             (4)%
EBITDA^1                                  1,497   flat    2,960      1%
Profit before tax^1                   608      7%    1,186      8%
Earnings per share - adjusted^1              6.0p      7%    11.7p      8%
 -             7.2p     13%    13.0p     15%
Interim dividend                                                   15%
Normalised^2 free cash flow                  £(247)m      192 £(572)m
Net debt                                                         9,037   £720m

Key points:

· More than 12m premises passed by fibre with over 950,000 now connected
and growing strongly

· 47% share of DSL, LLU and fibre broadband market net additions

· For the 2013 financial year we expect

· underlying revenue excluding transit to show an improved trend for the
second half of the year compared with the first half, but not for the year as
a whole

· to grow adjusted EBITDA and deliver normalised free cash flow broadly
level with 2012

^1 Before specific items

^2 Before specific items, pension deficit payments and the cash tax benefit of
pension deficit payments


Group results

              Second quarter to 30 September      Half year to 30
                     2012  2011         Change      2012        2011          Change
                       £m               %        £m          £m               %
- adjusted^1                                  
                    4,474           4,894            (9)     8,958       9,658    (7)
- reported                                            
(see Note           4,389           4,484            (2)     8,873       9,248             (4)
- underlying excluding                               (5)                           
transit^2                                                                                 (4)
- adjusted^1                     flat     2,960     
                    1,497           1,495                                2,931               1
- reported                                           
(see Note           1,362           1,428            (5)     2,823       2,798              1
- adjusted^1           1,515       
                      775             742              4                 1,439             5
- reported                1,378        
                    640             675            (5)                 1,306            6
before tax
- adjusted^1             1,186         
                     608             570             7                 1,103           8
- reported                   1,186          
                    602             552          9                 1,069           11
Earnings per
- adjusted^1                          
                6.0p            5.6p           7     11.7p       10.8p         8
- reported                         
                     7.2p            6.4p           13     13.0p       11.3p         15
dividend                                                      3.0p        2.6p        15
Capital               596               (9)     1,218  1,234   
expenditure                           652                                                  (1)
Free cash
-                     316              (44)       192         764     
normalised^3                          563                                                 (75)
- adjusted^1          478              (29)       516         979     
                                      671                                                 (47)
Net debt                                                     9,037       8,317 

Note: Reported revenue and EBITDA include  a specific item charge of £85m  and 
£58m, respectively, in both the second  quarter and half year to 30  September 
2012 relating to the  retrospective regulatory impact of  the Court of  Appeal 
decision on ladder  pricing. In  the prior  year reported  revenue included  a 
specific item charge of £410m relating to a retrospective regulatory ruling in
Germany, which had no impact on profits or cash. See Group results -  Specific 
items for more details.

Line of business results^1

                        Revenue                EBITDA         Operating
                                                                cash flow
Second quarter    2012     2011   Change  2012  2011 Change  2012  2011 Change
30 September        £m       £m        %    £m    £m      %    £m    £m      %
BT Global        1,757    2,014     (13)   130   159   (18) (171)  (55)    n/m
BT Retail        1,791    1,853      (3)   474   445      7   317   344    (8)
BT Wholesale       861      982     (12)   280   305    (8)   200   222   (10)
Openreach        1,269    1,280      (1)   582   567      3   246   350   (30)
Other and                       
intra-group    (1,204) (1,235)        3    31    19     63 (114) (190)     40
Total            4,474    4,894      (9) 1,497 1,495   flat   478   671   (29)


^1 Before specific items. Specific items are defined below

^2 Underlying revenue excluding transit is defined below

^3 Before specific items, pension deficit payments and the cash tax benefit of
pension deficit payments

n/m = not meaningful


1) Unless  otherwise  stated, any  reference  to revenue,  operating  costs, 
earnings  before  interest,  tax,  depreciation  and  amortisation   (EBITDA), 
operating profit, profit before  tax, earnings per share  (EPS) and free  cash 
flow are measured before specific items. The commentary focuses on the trading
results on an adjusted basis being  before specific items. This is  consistent 
with the  way that  financial performance  is measured  by management  and  is 
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 to similarly titled  measures used by other companies.  Reported 
revenue, reported EBITDA,  reported operating profit,  reported profit  before 
tax, reported EPS and reported free cash flow are the equivalent unadjusted or
statutory measures.

2) Underlying revenue, underlying costs  and underlying EBITDA are  measures 
which seek  to reflect  the  underlying performance  of  the group  that  will 
contribute to long-term profitable  growth and as such  exclude the impact  of 
acquisitions and disposals, foreign exchange movements and any specific items.
We are focusing on the trends in underlying revenue excluding transit  revenue 
as transit traffic is low-margin  and is significantly affected by  reductions 
in mobile termination rates.

3) Unless otherwise stated, the references  2011, 2012, 2013, 2014 and  2015 
are the  financial  years  to  31  March 2011,  2012,  2013,  2014  and  2015, 
respectively, except in relation to  our fibre roll-out plans and  recruitment 
plans which are based on calendar years.


Press office:

Tel: 020 7356 5369

Investor relations:

Tel: 020 7356 4909

A presentation for  analysts and investors  will be held  in London at  9.00am 
today and a simultaneous webcast will be available at

The third quarter  results for  2013 are expected  to be  announced on  Friday 
1February 2013.

About BT

BT is one  of the  world's leading  providers of  communications services  and 
solutions, serving  customers  in  more  than  170  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 and  internet products  and 
services  and  converged  fixed/mobile  products  and  services.BT   consists 
principally of  four lines  of business:  BT Global  Services, BT  Retail,  BT 
Wholesale and Openreach.

In the year ended 31 March 2012,  BT Group's revenue was £18,897m with  profit 
before taxation of £2,445m.

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.

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