BT to retain EE brand as profits surge by nearly a quarter
BT has seen pre-tax profits surge by nearly a quarter as it ruled out scrapping the EE brand following its takeover of the mobile operator. The telecoms giant said its results were ahead of expectations as its bolstered reported pre-tax profits by 24% to £862 million in the third quarter to December 31 2015.
It also recorded its best revenue growth for more than seven years – up 3% to £4.5 billion over the same period.
It came as the group announced a shake-up of the structure of the business following its takeover of mobile operator EE, but said jobs would not be impacted in the short term.
The group said the results were partly fuelled by a strong quarter from its consumers business, which saw revenues grow 11% to £1.2 billion.
Chief executive Gavin Patterson said the third quarter revealed a “strong set of results with good numbers across the board”.
He said: “BT Consumer had a stand-out quarter, increasing its overall line base for the first time in well over a decade and capturing 71% of new broadband customers.
“We have completed our acquisition of EE, the UK’s best mobile network provider, and are confident that we’ll deliver the anticipated cost and revenue synergies.”
BT, which enjoyed its first full quarter since securing the rights to broadcast Champions League football, added 97,000 new TV customers, driving up its total customer base to 1.4 million.
The growth was underpinned by a 46% spike in average viewing across its BT Sport channels, including “encouraging” audience figures around the group stages of the Champions League and the Europa League.
The company said its network business Openreach connected a net 494,000 new customers, a 32% increase.
BT sealed its £12.5 billion mega-merger with EE on Friday, creating the UK’s biggest telecoms company.
The tie-up has handed the telecoms giant 35% of the mobile consumer market and a similar share of the UK’s consumer broadband business.
The new structure of the company will include six lines of business: Consumer, EE, Business and Public Sector, Global Services, Wholesale and Ventures, and Openreach.
Mr Patterson added: “The acquisition provides us with a chance to refresh our structure and we have done that by creating a major new division that will focus on businesses and the public sector in the UK and Ireland.”
Regulator Ofcom is carrying out its first significant review of the telecoms sector for a decade, and is considering options including a split of BT networks business Openreach.
Openreach provides the final mile of network connection into consumers’ homes, and is used by rival operators.BT expects revenue growth for the full year to reach between 1% and 2%. AJ Bell analyst Russ Mould said BT was in a “buoyant mood” following its takeover of EE, but the possibility of having to sell Openreach remained a “cloud on the horizon”.
He added: “The latest figures underscore the importance of Openreach to the group’s growth.”