• Credit Suisse reiterated its “outperform” rating for BT Group.
  • Woodford Equity Fund reported that it had acquired a 1.4% stake in BT Group.
  • Berenberg noted the low valuation on BT Group, based on its current share price.
  • Group CEO Jansen bought 584,000 shares in the telco during mid‑September 2019.
  • BT Group confirmed its American Depositary Shares have been delisted from the New York Stock Exchange.

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BT Group financial reports roundup, October 2019

Source: Francisco Antunes / Flickr CC BY 2.0

  • Ahead of the brokers’ confab, Credit Suisse reiterated its “outperform” rating for BT Group, suggesting that “stars have aligned” in relation to its full-fibre rollout, with greater government and regulatory support for investment. In the weeks following the meeting, it once again confirmed its bullish rating on the telco.
  • The Woodford Equity Fund, until recently managed by now-outcast investment manager Neil Woodford, reported that it had acquired a 1.4% stake in BT Group for £47m during the first half of 2019. Woodford had previously held a significant stake in BT, which was jettisoned in 2016 (BTwatch, #277). Woodford‑managed funds have in recent years held significant stakes in fibre altnets. In May 2018, Woodford sold a 19% interest in CityFibre as part of the Goldman Sachs‑backed acquisition of the company. Earlier in the same year, Woodford sold a reported 25% share in Gigaclear to Infracapital. The fund is now, however, set to be liquidated with Woodford reportedly been sacked. Prior to the liquidation decision, Woodford Equity had been suspended as a result of a near two-year period of investor outflows, and over-exposure to illiquid assets.
  • A late‑September 2019 note from Berenberg noted the low valuation on BT Group, based on its current share price, but added that “being cheap is rarely a good enough reason alone to buy a telco, in a sector littered with value-traps”. The broker anticipates challenging trends reported for the first quarter (Q1 FY19–20) to continue in the Q2 statement (due to be released at the end of October 2019).
  • BT Group Chief Executive Philip Jansen bought 584,000 shares in the telco during mid‑September 2019, at an average price of 171p for a total transaction value of nearly £1m. This adds to his acquisition of approximately 1.5 million shares at 202p in June 2019. As part of the financial package surrounding his appointment, Jansen also acquired 770,500 shares for approximately £2m in November 2018. He has additionally been awarded 1.8 million shares as part of BT’s senior executive retention and bonus schemes.
  • BT Group confirmed its American Depositary Shares have been delisted from the New York Stock Exchange (BTwatch, #306). The intention to delist was revealed in August 2019, when it also notified JPMorgan Chase Bank of its intention to terminate its American Depositary Receipt (ADR) programme. BT said JPMorgan had provided notice of termination to all registered ADR holders. Ostensibly, the moves are being made to help simplify the reporting process and reduce costs. BT reiterated that it will continue to engage with US equity and debt investors — North American investors hold about 20% of BT’s equity — and that it remains committed to its customers operating in the USA.