The group saw consumer revenues drop 6 per cent to £2.4 billion in the three months to December 31, but underlying earnings in the division lifted 7 per cent to £669 million amid recent price rises, a surge in new fibre broadband customers and action to cut costs. A record 155,000 customers signed up to its full-fibre products in the quarter. Underlying earnings across the wider group nudged up 2 per cent to £2bn over the quarter.
BT said its consumer arm put in a “strong performance in tough market conditions”, but it was weighed down by the recent disposal of BT Sport. The figures come after the group recently warned over further job cuts and price hikes as it upped its cost-cutting targets in the face of soaring inflation and an uncertain wider economy.
The latest figures show pre-tax profits fell 15 per cent to £1.3bn in the first nine months of the year, though underlying earnings edged 3 per cent higher to £5.9bn. BT stuck by its full-year earnings outlook despite the pressure on pre-tax profits. Chief executive Philip Jansen said: “We’ve grown revenue and [underlying earnings] on a pro-forma, like-for-like basis, despite a challenging economic backdrop, and we’re transforming BT Group for the benefit of our customers. Despite extraordinary energy costs and other inflationary headwinds, we are reaffirming our outlook for the year.”
Charlie Huggins, head of equities at Wealth Club, noted: “Overall, BT faces an uphill battle in the current inflationary environment, and will have to run very hard just to stand still. Telecoms is a mighty challenging sector. There’s little to differentiate providers and regulators and consumers are always demanding more for less. So while BT is pushing through price increases, it must be careful not to push too hard.”
Matt Britzman, equity analyst at Hargreaves Lansdown, added: “Cost cuts remain the aim of the game as BT battles with higher costs from a host of angles.”