BT on Thursday reported a 14% rise in full-year pretax profit as cost cutting once again countered falling revenue.
The U.K. incumbent has also begun a charm offensive to convince competition watchdogs of the merits of its planned £12.5 billion takeover of EE.
BT’s shareholders on Thursday approved the proposed transaction, marking the start of the regulatory review process.
A day later, BT created an infographic espousing the virtues of bringing together the country’s largest fixed-line and mobile service providers.
Pitching itself as "a new champion for U.K. communications", BT said there is little overlap between the companies and claims the deal will bring more competition to the bundled services market, where it competes with TalkTalk, Virgin Media and Sky.
BT also pointed out that the merger will create the largest investor in fixed and mobile infrastructure in the U.K. and the third largest investor in R&D.
Until the deal closes, BT will rely on its MVNO service to help it regain a foothold in the U.K. mobile market.
Launched in late March, BT said it has already signed up 50,000 customers.
That disclosure came alongside the company’s fiscal fourth quarter and full-y ear financial results.
In the 12 months to 31 March BT’s revenue fell 2% to £17.9 billion, triggered by £231 million in foreign exchange losses and a £119 million decline in transit revenue. However, operating costs decreased by £591 million to £11.6 billion.
Full-year EBITDA edged up 3% to £6.3 billion, while pretax profit surged 14% to £2.6 billion.
BT’s fiscal fourth quarter performance was consistent with its full year performance: revenue fell 2% to £4.6 billion on £33 million of foreign exchange losses and an £11 million reduction in transit revenue. Operating costs fell by 7% to £2.8 billion, while EBITDA grew 7% to £1.8 billion and pretax profit increased 13% to £842 million.
Q4 revenue was down at all of BT’s divisions with the exception of BT Consumer (see chart), where a strong performance by its broadband and TV businesses helped to drive revenue up 3% to £1.1 billion. Retail net additions at BT broadband came in at 121,000, taking its customer base to 7.7 million. Retail fibre connections grew by 266,000 to 3.3 million. The telco also added 52,000 TV subscribers, taking its customer base to 1.4 million.
"Our BT Sport TV channels are now in more than 5.2 million homes," said BT CEO Gavin Patterson, in a statement.
Meanwhile, BT’s infrastructure arm Openreach turned in flat fourth quarter revenue, attributable to a £50 million regulatory impact.
Nonetheless, "we delivered our best ever performance for fibre connections in the fourth quarter with Openreach adding almost half a million premises to our network," Patterson said.
At BT Business, r evenue fell 2% to £805 million in Q4, driven primarily by a 9% decline in SME and corporate voice revenue, as customers continued to opt for data and VoIP services.
BT Wholesale reported flat revenue, as growth in IP services and order intake were offset by declines in transit revenue, lower call volumes and broadband revenue, which was driven by continued migration to local loop unbundling (LLU).
Meanwhile, revenue at BT Global services fell 7% in the quarter as growth in AMEA was offset by declines in Latin America, where the telco’s numbers were hit by currency fluctuations. Fourth quarter order intake fell 9% to £2 billion.
For the coming 12 months, BT expects growth in underlying revenue excluding transit. The company also expects modest growth in adjusted EBITDA.
