BT share price rises as company reports strong profit growth in Q3
BT Group Plc (LON:BT.A) has had a “standout” third quarter, with revenue and pre-tax profit growing strongly over the three months to December 31.
The telecoms giant revealed today in a trading statement that its Q3 pre-tax profit had increased 24 percent year-on-year to £862 million. Revenue came in three percent higher at £4.59 billion, which BT said was its best result in seven years.
The figures were underpinned by a strong performance at BT’s consumer division, which enjoyed strong demand for its offerings, including superfast broadband, football TV coverage and mobile data bundles.
The company’s chief executive officer, Gavin Patterson, commented: “These are exciting times at BT. We have completed our acquisition of EE, the UK’s best mobile network provider, and are confident that we’ll deliver the anticipated cost and revenue synergies. EE will become a separate consumer-focused line of business within the group.”
Last week BT completed its £12.5-billion acquisition of Britain’s largest mobile carrier, EE, opening the way to creating a single integrated network offering of broadband, mobile and TV services. Today, the company announced plans to overhaul its structure following the acquisition, with the changes taking effect from April.
In a separate statement accompanying the third quarter results, the company revealed that, under the new structure, it would have six lines of business. Two of those – BT consumer and EE – will serve consumers, while another two will focus on businesses and the public sector. The telco said that the changes would not affect Openreach, the infrastructure unit that is currently being reviewed by industry regulator Ofcom.
In today’s trading, BT shares were up 1.3 percent at 491.37p, as of 08:16 GMT. The stock has risen nearly three percent since the start of the year and the company’s market capitalisation currently stands at £49 billion.
The 21 analysts offering 12 month price targets for BT have a median target of 525.00p, with a high estimate of 600.00p and a low estimate of 240.00p. As of January 30, 2016, the consensus forecast amongst 24 polled investment analysts covering BT had it that investors should hold their position in the company. The same consensus estimate has been maintained since November 27, 2015, when the sentiment of investment analysts deteriorated from “outperform”.
As of 09:14 GMT, Monday, 01 February, BT Group plc share price is 493.73p.