ShareProphets

The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares


Join ShareProphets at less than 2p per article

> All the big AIM fraud exposés

> 300 articles and podcasts a month

> Hot share tips

> Original investigations by our experienced team

> No ads, no click-bait, no auto-play videos

Find out more

Friday I'm in love (with a higher BT Group share price)

By Chris Bailey | Friday 27 July 2018


Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


It has been a busy, busy week and sad sacks like me are going to be bent over a hot laptop during the weekend catching up with the multitude of earnings numbers published by corporate names around the world this week. Turning to London-based results specifically, some good news within the UK market today for the old stalwart BT Group (BT.A).

This has not been a classic call but I did not lose the faith as I mentioned earlier this week, especially with the appointment of a new ball-breaking Chairman. Some more early signs that Jan du Plessis - who did a super job sorting out Rio Tinto (RIO) a few years back - is having an impact within today's first quarter update.

The results were far from great with revenues down as regulatory pressures bit and free cash flow hit by higher capex...but these trends are in the price and more. BT has to play offensively and not defensively and getting aggressive means thinking differently. Aspiring to put together an excitable bundle of broadband, mobile, pay-TV and even conventional old fixed line should be the focus.

It has the brands to do it following the EE mobile acquisition of a couple of years ago. Today's presentation document noted 12 new product launches since May and stats like '66% of broadband customers now on fibre' and 'fixed and mobile churn remained low' for me indicates more opportunity than threat. Similarly the problem children within the broader BT Group mix of the Global Services and Public Sector businesses appear to have turned a corner with comments like 'headwinds now largely behind us...improving cost position'.

There is still work to be done in all areas but it just needs the management aggression to make the most of it. This is why the Chair's upcoming appointment of a new CEO is going to be hugely important. My guess is that he appoints someone akin to his own no-nonsense personality - and that would be a big positive.

In the meantime, the reiteration of full year numbers puts the shares at a lowish earnings multiple and covers the 6% dividend yield. The shares should be much closer to 300p than they currently are. Still a buy for me.


Filed under:


Never miss a story.




This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.


More on BT


Comments

Comments are turned off for this article.


Site by Everywhen