Analysts have flagged both positives and negatives for BT Group (LON:BT.A) after the telco announced that its chief executive Gavin Patterson will step down this year, WebFG News reports. The former telecoms monopoly announced on Friday that he would step down later this year.
BT’s share price rose in the previous session as investors digested the news, adding 0.99 percent to 204.95p and outperforming the broader UK market, with the benchmark FTSE 100 index closing marginally in negative territory. The telco’s shares, however, remain a little over 30 percent down over the past year.
UBS points to issues for new CEO
WebFG News reported on Friday that UBS thought that news of BT CEO’s departure ‘could be positive for investor sentiment’ while doubting whether the board can, as they suggest, make no change to strategy. The announcement of Patterson’s departure came after investor backlash over the group’s recent results and strategy update.
“We think issues that an incoming CEO will have to address are: the pace of FTTH rollout at Openreach; the strategy around BT Sport; the future of Global Services; execution of the Transformation programme and how much of the £1.5bn pa of cost savings should be re-invested back into the business.”
Other analysts on CEO departure
The newswire also quoted Jefferies as commenting that it seemed ‘highly unlikely’ that news of Patterson’s departure signalled near-term risk to forecasts, especially since BT did not update on the outlook in the statement. Macquarie meanwhile feels that the telco’s chief executive paid the price for his losing battle with industry regulator Ofcom over the telco’s network division Openreach and failure to recognise that the investment tide was moving against BT’s previous cash flow targets, WebFG News reports.