Return to pre-pandemic revenues could take two years, warns BT

Philip Jansen

BT reported solid results but has warned that profits may not return to pre-Covid levels until 2022-23.

Revenues dropped by 8% for the first half of its 2020-21 financial year, to £10.59 billion. The company described this as relatively resilient and attributed the dip to reduced BT Sport revenue, a reduction in business activity in enterprise units, and declines in legacy products.

The company however said that it took positives from improving customer satisfaction and the continuing rollout of both 5G and fibre – the latter of which exceeded 3.5 million premises during the quarter.

CEO Phillip Jansen also told reporters that the past six weeks have also seen an increasing volume of inquiries at its call centres, improved online visits, and store sales which have surpassed pre-Covid levels. BT-owned EE has branded itself as the de facto leader in 5G in the UK, and has been at the forefront of much of the country’s marketing around the latest iPhone.

In his note to investors, Jansen said: “BT delivered financial results in-line with expectations for the first half of the year, thanks to strong operational performance during exceptional circumstances. Customer demand during the pandemic has shown how critical our networks have become, and our significant network investments have helped us double the number of Openreach’s FTTP orders compared to this time last year and have seen our leading 5G network expand to 112 towns and cities across the UK.

“We continue to invest to make BT more competitive and I’m pleased to see the quality of our products and services improving. At the same time we are firmly on track with the delivery of our modernisation programme and have delivered £352 million in cost savings in the first half of the year.”

However, Jansen added that the company will only reach or surpass its 2019/20 earnings of £7.9 billion by 2022-23. This, he said, “will be driven by the continued recovery from Covid-19, enhanced by sales of our converged and growth products, and by significant savings from [BT’s] modernisation and cost saving programme.”

Overall, the CEO said that the first-half financial performance was in line with expectations in light of the pandemic.