BT shares plunge after tough quarter for global division

BT’s global arm which services multi-national companies weighed heavily on the telecoms provider last quarter as the pandemic created a challenging market.

The group’s adjusted revenue dipped from £5.25 billion to £5.07 billion in the three months to the end of July.

Around three quarters of the company’s lost revenue came from the global division, which focuses on business clients.

“Revenue decline was primarily due to more challenging than expected market conditions resulting from Covid-19, the impact of prior year divestments, and a £39 million negative foreign exchange movement,” BT said of the global division on Thursday.

Investors proved unhappy with the announcement. Shares dropped as much as 6.9% early in the trading day, although they later recovered some ground.

During the same period last year, Covid-19 had provided a boost for BT’s global division. As customers went into lockdown for the first time they were paying for conference calls, which BT charges big margins on.

Analysts had therefore expected to see a drop compared to that period. Yet BT’s £5.07 billion revenue still undershot the £5.15 billion that the experts had forecast.

Pre-tax profit also dipped, by 4% to £536 million.

“Our results were overall in line with our expectations during the quarter, with good performance in the UK offsetting challenging conditions in global’s markets,” said chief executive Philip Jansen.

He added: “With trading conditions expected to see some improvement through the year, we have confirmed our outlook and remain confident that BT is on a path to growth.”

That outlook is to largely expect the same revenue this year as BT reported last time around.

In the UK market, BT’s revenue from selling to consumers grew by 1% as BT Sport delivered a strong performance and the company sold more handsets directly to customers.