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BT earnings beat expectations after EE acquisition

Published 27/10/2016

BT said adjusted revenue rose 1.1% to £6 billion while pre-tax profit grew 24% to £873 million
BT said adjusted revenue rose 1.1% to £6 billion while pre-tax profit grew 24% to £873 million

BT has reported better than expected earnings for the second quarter as the telecoms giant continues to attract customers following its acquisition of EE.

The group said adjusted revenue rose 1.1% to £6 billion while pre-tax profit grew 24% to £873 million.

BT added 63,000 new customers in the quarter, while EE saw numbers rise by 280,000.

Chief executive Gavin Patterson said: "This is a positive set of results, both operationally and financially, and we remain on track to achieve our full year outlook.

"We've made good progress on the integration of EE and the delivery of our synergy targets."

Mr Patterson added that the firm has submitted its response to a consultation on digital communications being carried out by Ofcom, which wants an overhaul of BT's Openreach broadband network.

BT said its pension deficit rose from £6.2 billion in June to £9.5 billion.

Shares were down 1.96% to 380p in morning trading.

George Salmon, equity analyst at Hargreaves Lansdown, said: "BT has again reported impressive growth in its consumer division. The group continues to hoover up the majority of new broadband connections and more customers are switching on to BT's TV package.

"However, the elephant in the room is the increase in the pension deficit. With a deficit that size, extra contributions will surely be needed to plug the shortfall after the next review in June.

"BT also need to service the extra debt taken on to fund the EE acquisition."

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