BT meets expectations thanks to strong broadband demand

Shares in BT Group edged almost 1% higher early on Thursday (27 October), after the telecom giant posted a sharp increase in third quarter profit, thanks to strong demand for faster fibre broadband connections.

In the three months to the end of September, the FTSE 100-listed company recorded a 1.1% year-on-year increase in underlying revenue, excluding the acquisition of EE, to £6bn.

Adjusted pre-tax profit, meanwhile, increased 24% compared to the same period last year, to £873m.

BT said it added 63,000 TV customers and 280,000 contract customers at EE during the quarter and it also took 65% of the 116,000 new broadband customers added by Openreach.

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

"We've made good progress on the integration of EE and the delivery of our synergy targets. Our consumer facing lines of business have performed well, but in the enterprise space, UK public sector continues to be a challenging market."

In January, BT acquired EE, Britain's biggest mobile company, for £12.5bn and Patterson added the company was stepping its investments on ultrafast broadband and 4G plans into 2017.

Meanwhile, BT posted a non-cash specific item charge of £145m following its initial investigation into inappropriate management behaviour in BT Italia and net cash inflow from operating activities stood at £1.73bn, up £489m from the previous year.

However, it was not an entirely rosy picture for the telecoms groups, which reported its pension deficit widened to £9.5bn in the third quarter, compared to £6.2bn at the end of June.