BT Group: Consumer and Openreach Divisions Keep Maintaining Growth; CEO Allison Kirby Takes Helm

We are pleased with how BT Group is faring so far in fiscal 2024. Revenue and EBITDA grew by 3% and 1%, respectively, in the last quarter. In the consumer business revenue and EBITDA each grew by 3% as BT continues to raise prices in broadband and mobile, a measure that Vodafone and Virgin Media O2 also carried out, limiting customer migrations between operators. Consumer broadband and mobile average revenue per user increased by 5% and 8%, respectively. Openreach saw a 7% increase in revenue, which translated into 11% growth in EBITDA year on year (12% growth last quarter), as the average wholesale ARPU keeps increasing and more clients sign up for fiber-to-the-home plans, where wholesale prices are higher than that for digital subscriber lines. The FTTH take-up rate increased to 34% compared with 33% last quarter. The business division is experiencing a very challenging year, with EBITDA down 17% on the last quarter as costs kept increasing. We are maintaining our GBX 200 fair value estimate and see shares as undervalued.