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Saturday 21 September 2019

BT signals higher full-year profits as shares soar

The telecoms giant expects annual earnings to be in the upper half of its £7.3bn to £7.4bn range.

BT is guiding for higher profits (PA)
BT is guiding for higher profits (PA)

By Ravender Sembhy, Press Association City Editor

BT has said it expects annual profit to come in at the upper end of expectations after what it called an “encouraging” half-year showing.

The telecoms giant posted a 2% increase in adjusted earnings for the six months to September 30 to £3.68 billion, driven by high-end smartphone sales at EE, as well as cost savings.

BT said it expects full-year earnings to be in the upper half of its £7.3 billion to £7.4 billion range.

On a pre-tax basis, profits were up 24% at £1.34 billion in the period.

Outgoing boss Gavin Patterson said: “We continued to generate positive momentum in the second quarter, resulting in encouraging results for the half-year.

“In consumer, we continue to see strong sales of our converged product, BT Plus, and have seen good mobile sales following new handset launches.”

BT shares soared nearly 10% following the update to 263p.

George Salmon, equity analyst at Hargreaves Lansdown, said: “The real positive for investors is that, after a tough few years, BT is starting to look more stable.

“The pension deficit is coming down and investment requirements should flatten out from here. That helps shore up cash flows, and diminishes the likelihood of any further amendments to the dividend plans.”

However, BT booked a 2% dip in revenue for the first half to £11.6 billion.

The company said growth in its consumer business was offset by regulated price reductions in Openreach and declines in its enterprise unit.

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Gavin Patterson is stepping down as BT chief executive after five years in the role (John Stillwell/PA)

Last month, BT said that Worldpay boss Philip Jansen will become its new chief executive and take up his role on January 1.

Mr Patterson’s departure was announced earlier this year amid waning support for the company’s trajectory.

BT chairman Jan du Plessis said that, while Mr Patterson had the backing of the board, wider support was starting to wane.

Mr Patterson’s departure will end a near-five year stint as chief executive, having been at BT for a total of 14 years.

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