(Bloomberg) -- BT Group Plc met third-quarter estimates as it faced strikes and inflation in the period, leaving investors focused on Chief Executive Officer Philip Jansen’s full-year earnings target. Shares rose.
The former UK telecom monopoly reiterated full-year guidance “despite inflationary headwinds” as it hikes prices and slashes costs, it said Thursday in a trading update. Jansen previously forecast 2023 adjusted earnings of at least £7.9 billion ($9.7 billion), which would be an annual increase of 3.9%.
BT said adjusted earnings before interest, tax, depreciation and amortization were £2 billion, matching an average forecast of six analysts surveyed by Bloomberg.
To help cut costs, Jansen has deepened a years-long restructuring program, targeting savings of £3 billion annually by the end of 2025 versus a 2020 baseline. In December, BT announced the merger of two units, Global and Enterprise, to save £100 million a year. The measures will include job cuts, but the company won’t yet say how many.
“We haven’t got a specific number, but it is true, we will have fewer people in BT as we go forward, across the board,” Jansen told reporters in a call on Thursday. “That’s going to be a continuing plan over the next few years as we reduce our cost base, get more productive, take out inefficiencies, stop replicating stuff in certain areas including Enterprise.”
BT’s total headcount of about 100,000 has barely changed in recent years, as attrition and cuts have been offset by the hiring of thousands of engineers to build a £15 billion fiber optic network across the UK. That large network staff will eventually be wound down, Jansen said.
Jansen inherited a large savings program when he took over in February 2019. Since then, BT shares have lost almost half their value, as it contended with forty-year high inflation, coronavirus and a darkening UK economic outlook. It has also struggled as it spent heavily on new networks while facing price regulation, strong competition and a ban on key supplier Huawei Technologies Co.
Billionaire Patrick Drahi’s Altice, BT’s biggest shareholder with an 18% stake, believes the company is undervalued, a financial adviser to the group told Bloomberg this week.
A lower average energy price after spikes in 2022 “certainly gives us some help” for the upcoming fiscal year, Chief Financial Officer Simon Lowth said on the media call. BT uses about 1% of Britain’s electricity.
Shares rose as much as 6%, the most since November 2021. They were up 2.8% at 127.40 pence at 10:15 a.m. in London.
(Updates with CEO quote and context)
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