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BT share price rallies as telco nudges full-year earnings guidance

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Shares in BT Group (LON:BT.A) have soared in London this morning as the blue-chip group posted its interim results, noting that it expects its full-year earnings to come in at the upper end of its guidance. The results come as the group’s chief executive Gavin Patterson prepares to step down from the company, to be succeeded by Worldpay’s (LON:WPG) outgoing boss Philip Jansen.

As of 09:54 BST, BT’s share price had added 8.58 percent to 261.20p. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally into the red and currently standing 0.03 percent lower at 7,126.11 points.

BT posts Q2 results

BT announced in a statement this morning that reported revenue had slipped two percent in the first half of its financial year to £11.59 billion, with growth in the group’s consumer business offset by regulated price reductions in Openreach and declines in enterprise businesses. The group’s profit before tax meanwhile rose two percent to £1.34 billion, mainly driven by higher volume and mix of high-end smartphones in the telco’s consumer business and restructuring related cost savings.

BT meanwhile noted that based on current trading, it expects its EBITDA to be in the upper half of its range of between £7.3 billion and £7.4 billion. The telco, however, announced an interim dividend of 4.62 pence per share, or 30 percent of last year's full-year dividend of 15.4 pence per share.

“We continued to generate positive momentum in the second quarter resulting in encouraging results for the half year,” the telco’s outgoing chief executive Gavin Patterson commented in the statement, adding that the group’s strategy was ‘delivering’.

Analysts weigh in

Reuters quoted analysts at Citi, who have a ‘neutral’ rating on the former telecoms monopoly, as commenting that the results were “solid with steady improvements in the underlying trends”.

Proactive Investors meanwhile quoted Richard Hunter, head of markets at Interactive Investor, as noting that while the dividend decrease was an ‘unwelcome surprise,’ it may be a prudent move given the decline in net cash. He further believes that it “should not take too much sheen on a dividend yield, which previously stood at an attractive 6.4 percent”.

As of 10:02 GMT, Thursday, 01 November, BT Group plc share price is 263.04p.

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