BT Group reported revenue of GBP 5.71 billion for the fiscal first quarter to 30 June, with underlying revenue down 2 percent as growth in the consumer business was offset by declines in the enterprise businesses and regulated price reductions for its wholesale arm Openreach.
Adjusted EBITDA was up 1 percent to GBP 1.80 billion, mainly driven by cost savings related to restructuring and stronger handset margins in the consumer business. Reported profit before tax for the quarter was GBP 704 million, with adjusted profit before tax up 3 percent to GBP 816 million. Normalised free cash flow was down 9 percent to GBP 507 million, mainly due to increased cash capital expenditure offset partly by timing of working capital improvements. Reported capital expenditure was broadly flat in the quarter at GBP 839 million.
BT said that its ultrafast broadband roll-out has now passed over 1.7 million premises, with the company now building FTTP to around 10,000 premises per week. Monthly fixed ARPU was up 1 percent in the quarter to GBP 37.90, with an increased mix of SIM-only reducing post-paid mobile ARPU by 1 percent to GBP 21.70. Superfast fibre accounted for 65.6 percent of the consumer broadband base in Q1, up from 57.8 percent a year earlier. Fixed and post-paid mobile customer churn rates were both 1.2 percent for the three months.
The Consumer division saw revenue increase 2 percent year-on-year to GBP 2.59 billion, with adjusted EBITDA up 10 percent to GBP 610 million. Revenue growth was driven by high-end smartphones, an increase in the SIM-only base and customers now paying for BT Sport. BT expects sport rights and device costs to increase later in the year. The new BT Plus converged offering signed up more than 100,000 customers in the quarter.
BT Global Services saw revenue fall 8 percent to GBP 1.15 billion, with adjusted EBITDA up 30 percent to GBP 95 million. This revenue decline was mainly driven by BT's decision to reduce low-margin business. The increased EBITDA was the result of the true up of the 2017/2018 annual bonus and lower labour costs from the ongoing restructuring programme. Total order intake for BT Global Services was down for the quarter and on a 12-month rolling basis, reflecting a change in customer behaviour, including shorter contract terms and increased usage-based terms, the company said.
Openreach saw revenue fall 2 percent to GBP 1.22 billion, with adjusted EBITDA down 9 percent to GBP 567 million. This fall in revenue was driven mainly by around GBP 90 million of regulated price reductions on FTTC and Ethernet products and a fall in the physical line base, partly offset by growth of 26 percent in the FTTC rental base and 11 percent growth in the Ethernet rental base.
