BT on Thursday turned in another solid set of quarterly financials, continuing its recent trend of growth at its consumer business being offset by weakness at Global Services.
The U.K. incumbent posted flat adjusted revenues of £4.38 billion (€6.1 billion) in the three months to the end of September, while adjusted EBITDA fell by 1% to £1.44 billion.
Earnings were negatively affected by the telco’s investment in BT Sport Europe, the new channel BT launched earlier this year as the home for its Champions League football and other sports content.
BT’s investment in sports is already leading to sales growth. BT Sport Europe’s con tribution was "better than we expected, helping drive a 7% increase in BT Consumer revenue," BT chief executive Gavin Patterson said.
The telco’s consumer business brought in £1.13 billion in revenues, buoyed by the addition of 106,000 TV customers, the operator’s best quarterly adds to date. However, consumer EBITDA fell by 23% to £202 million.
BT added 82,000 retail broadband customers in the quarter, which it claims is 51% of U.K. DSL and fibre broadband net adds. 44% of the telco’s 7.88 million retail broadband customers are on fibre.
"Mobile is another growth area and I am pleased our consumer customer base now stands at more than 200,000," Patterson said.
BT received some good news on the mobile front this week. On Wednesday the Communications and Markets Authority (CMA) gave its preliminary approval to BT’s planned acquisition of EE, without suggesting competition remedies. It is due to make its final decision by 18 January next year.
But while the consumer side of the business is performing well, BT has less to smile about when it comes to its enterprise services arm.
BT Global Services posted a 5% revenue decline to £1.56 billion, while EBITDA slid by 10% to £216 million.
That 5% decline included a £45 million negative impact from foreign exchange movements and a £9m decline in transit revenue, BT said.
"Underlying revenue excluding transit decreased 2% primarily reflecting lower revenue in the U.K. and in the U.S. and Canada," it explained.
An 8% revenue decline in the U.K. was an improvement on recent quarters, but continues to reflect the ongoing decline in public sector revenues, the telco said. In the U.S. and Canada it reported an 11% decline in underlying revenue, excluding transit, because "a major customer" has started to insource some services.
However, the telco brought down operating costs at Global Services by 6% to £1.34 billion.
And its total order intake in Q2 was £1.8 billion, up by 36%, and stands at £7.1 billion on a rolling 12-month basis, up by 16%.
"Our strategy is delivering and our results show we’re on track to achieve our outlook for the year," Patterson said, of the overall group numbers.
For the full year to the end of March, BT expects to report growth in underlying revenue excluding transit, and "modest growth" in adjusted EBITDA, with normalised free cash flow of around £2.8 billion.
