SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
12 February, 2004
BT Group plc
(Translation of registrant's name into English)
BT Centre
81 Newgate Street
London
EC1A 7AJ
England
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F..X... Form 40-F.....
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes ..... No ..X..
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- ________
Enclosures: 1. 3rd Quarter Results announcement made on 12 February 2004
February 12, 2004
THIRD QUARTER AND NINE MONTHS RESULTS TO DECEMBER 31, 2003
THIRD QUARTER HIGHLIGHTS
- Earnings per share* of 4.4 pence, up 7 per cent
- Profit before taxation* of GBP526 million, up 1 per cent
- Group turnover of GBP4,578 million, down 2.6 per cent (down 1.4 per cent
excluding the impact of mobile termination rate reductions)
- New wave turnover of GBP838 million, up 31 per cent
- Net debt of GBP8,795 million, 32 per cent lower than previous year
- Contract wins of over GBP2 billion in the quarter
- Broadband end users approaching 2 million
*Before goodwill amortisation and exceptional items.
Chief Executive's statement
Ben Verwaayen, Chief Executive, commenting on the third quarter results, said:
"The transformation of our marketplace is accelerating and BT is driving that
change by providing our customers with new technology and services with greater
capabilities and lower cost.
"Our new wave revenues grew by 31 per cent in the quarter, our highest rate of
growth yet. This has offset much of the impact of the 6 per cent* decline in our
traditional business.
"The momentum of this transformation is building with broadband volumes now
approaching 2 million lines and we are now taking orders of over 45,000 per
week. In addition, we are becoming a major international ICT solutions provider
with well over GBP2 billion of orders in this quarter alone."
Group Finance Director's statement
Ian Livingston, Group Finance Director, commenting on the third quarter results,
said:
"Earnings per share before goodwill amortisation and exceptional items increased
by 7 per cent over last year to 4.4 pence in the quarter, and by 26 per cent to
13.0 pence per share in the nine months which is more than twice the level of
two years ago.
"Profit before tax, goodwill amortisation and exceptional items increased by
1 per cent despite the challenges faced by our business as the pace of
transformation quickens. This has been achieved through the success of our
continued cost efficiency programmes and lower interest charges.
"We remain committed to growing long term shareholder value by transforming our
revenue streams to new wave products and services; driving more than GBP1
billion of cost savings over the next 3 years; investing for the future; and
managing the group's balance sheet more effectively."
*After adjusting for the impact of regulatory reductions to mobile termination
rates.
RESULTS FOR THE THIRD QUARTER AND NINE MONTHS
TO DECEMBER 31, 2003
BT Group's results before goodwill amortisation and exceptional items
Third quarter Nine months
--------------------------------- ---------------------------------
2003 2002 Better (worse) 2003 2002 Better (worse)
GBPm GBPm % GBPm GBPm %
Group 4,578 4,701 (3) 13,732 13,949 (2)
turnover
EBITDA 1,474 1,513 (3) 4,404 4,294 3
EBITDA before
leaver costs 1,500 1,525 (2) 4,457 4,499 (1)
Group
operating
profit 743 758 (2) 2,221 2,057 8
Net interest
charge 223 285 22 664 880 25
Profit before
taxation 526 521 1 1,557 1,339 16
Profit after
taxation 382 354 8 1,112 900 24
Earnings per
share 4.4p 4.1p 7 13.0p 10.3p 26
Capital
expenditure 699 613 (14) 1,829 1,721 (6)
Free cash (68) 19 n/m 1,135 777 46
flow
Net debt 8,795 12,917 32
The results in the table above and the commentary focus on the results before
goodwill amortisation and exceptional items.
Total earnings per share and profit before tax, after goodwill amortisation and
exceptional items, for the third quarter are 4.5 pence (2002 - 5.2 pence) and
GBP519 million (2002 - GBP567 million) respectively. For the nine months they
are 12.9 pence (2002 - 12.0 pence) and GBP1,525 million (2002 - GBP1,440
million).
The full profit and loss account, cash flow statement and balance sheet are
provided on pages 15 to 20.
GROUP RESULTS
Whilst driving a significant transformation in our business, BT continued to
make further progress in the quarter with earnings per share before goodwill
amortisation and exceptional items 7 per cent ahead of the same quarter last
year and 26 per cent ahead in the nine months to date.
The acceleration of this transformation is demonstrated by the 31 per cent
growth of new wave turnover to GBP838 million compared to a 25 per cent increase
in the second quarter. New wave turnover represented 18 per cent of total
turnover in the quarter, compared to 14 per cent in the third quarter of last
year. New wave turnover is mainly generated from Information and Communications
Technology (ICT) solutions, broadband, mobility and managed services.
Performance in the quarter was driven by particularly strong growth in broadband
and our solutions businesses. However, this was more than offset by an
8 per cent decline in turnover from the group's traditional businesses. This
decline reflects regulatory intervention, price reductions and technological
changes that we are using to drive customers from traditional services to better
value and more flexible new wave services, such as broadband and IPVPN's. The
decline in traditional turnover is 6 per cent after excluding the impact of
regulatory reductions to mobile termination rates. These reductions are passed
on to BT customers resulting in lower charges but are profit neutral.
The pace of this change means it has continued to be a challenging quarter in
which total group turnover decreased by 2.6 per cent year on year to GBP4,578
million. Excluding the regulatory reductions on mobile termination rates
underlying turnover fell by 1.4 per cent, which compares to the 0.6 per cent
decline last quarter.
Consumer revenues in the third quarter were 3 per cent lower (2 per cent lower
excluding the impact of reductions to mobile termination rates) year on year.
BT Together packages provide an important element in defending traditional
turnover with an increase of 73,000 customers over last year. In the consumer
fixed voice market, Carrier Pre Selection (CPS) has had some impact on our
business with BT's consumer market share, as measured by volume of fixed to
fixed voice minutes, declining by 0.2 percentage points to an estimated 72.2 per
cent compared to last quarter. The underlying average revenue per customer
household (net of mobile termination charges) of GBP269 was broadly in line with
the level achieved in the third quarter of last year. Contracted revenues have
increased to 59 per cent compared to 56 per cent last year.
The aggregate Business and Major Corporate revenues also declined by 3 per cent
year on year. BT's business market share of fixed to fixed voice minutes
declined by only 0.2 percentage points to an estimated 41.0 per cent compared to
last quarter despite the effect of CPS. This compares to a quarterly decline of
around 0.9 percentage points over the previous four quarters.
Revenues from smaller and medium sized businesses reduced by 6 per cent
(GBP41 million) from the third quarter last year, showing the net impact of call
volume reductions in our traditional telephony services as customers switch into
new wave services such as broadband. However, BT Business Plan, launched in
January 2003, had successfully attracted more than 216,000 business locations
(147,000 customers) by December 31, 2003, helping to stem the rate of market
share decline.
Major Corporate (UK and international) revenues reduced by 2 per cent (GBP31
million) with the growing new wave turnover not fully offsetting the decline in
traditional UK services. There is a continued migration of traditional voice
only services to managed ICT contracts. Contract wins from the Solutions and BT
Syntegra businesses amounted to more than GBP2 billion in the third quarter.
Within this are two contracts that BT Syntegra won against multi-national IT
competitors from the Department of Health as part of the NHS National Programme
for IT, worth an expected GBP1.6 billion over the next 10 years. Group ICT
turnover grew by 18 per cent to GBP0.6 billion in the quarter confirming BT's
status as a major provider in this market.
Wholesale (UK and international) revenue fell by 1 per cent (2 per cent increase
excluding impact of reductions to mobile termination rates). We achieved
52 per cent growth in new wave turnover from our UK Wholesale business which
partly compensated for the decline in our UK Wholesale prices. The international
carrier business turnover grew by 16 per cent in the third quarter, of which
5 percentage points were due to currency movements.
Group operating costs before goodwill amortisation and exceptional items reduced
by 3 per cent compared to the third quarter of last year reflecting the group's
continued focus on operational efficiency and effectiveness initiatives offset
by investment in new wave initiatives and the adverse impact of currency
movements of GBP25 million. Net staff costs, excluding leaver costs of
GBP26 million, increased by GBP34 million to GBP865 million due to the impact of
increases in pay rates, national insurance (GBP8 million) and the SSAP24 pension
charge (GBP28 million), offset by improved efficiency. Payments to other
telecommunication operators were GBP68 million (7 per cent) lower than last year
mainly reflecting a reduction in UK payments, primarily due to the lower mobile
termination rates. Other operating costs before goodwill amortisation and
exceptional items were reduced by 6 per cent largely due to efficiency cost
savings offset by the adverse impact of currency movements.
Depreciation was GBP23 million lower than the third quarter of last year at
GBP731 million reflecting more efficient capital expenditure over recent years.
As a result of these cost savings the group operating profit margin before
leaver costs was 16.8 per cent, an increase of 0.4 percentage points on the
level achieved in the third quarter of last year. We have cost transformation
programmes in place to deliver further savings of more than GBP1 billion over
the next 3 years.
Group operating profit before goodwill amortisation, exceptional items and
leaver costs was flat compared to the third quarter of last year. The
GBP14 million increase in leaver costs this year means that the group operating
profit after leaver costs was 2 per cent lower than the third quarter of last
year. This performance reflects lower profits in the group's UK wholesale and
retail businesses partially offset by the GBP62 million improvement in BT Global
Services.
BT's share of associates and joint ventures operating profits before goodwill
amortisation and exceptional items was GBP5 million in the quarter (GBP47
million last year). The prior year included the results of our interest in
Cegetel which was sold in January 2003.
Net interest payable before exceptional items was GBP223 million for the
quarter, an improvement of GBP62 million against last year as a result of the
significant reduction in the level of net debt. Profit before taxation, goodwill
amortisation and exceptional items of GBP526 million in the quarter increased by
1 per cent.
The taxation rate on the profit before exceptional items and goodwill
amortisation was 27.4 per cent in the quarter (32.1 per cent last year) and 28.6
per cent for the year to date (32.8 per cent last year). The lower effective tax
rate reflects reduced overseas losses for which relief is not available and
greater tax efficiency in the group.
Earnings per share before goodwill amortisation and exceptional items were
4.4 pence for the quarter (4.1 pence last year), an increase of 7 per cent and
were 13.0 pence for the nine months to December 31, 2003, an increase of
26 per cent over last year.
Exceptional items and goodwill
There was a net exceptional charge before taxation of GBP4 million in the
quarter. During the quarter the group's main disposal was its 7.8 per cent
interest in Inmarsat which was sold for US $118 million (GBP67 million)
realising an exceptional profit on disposal of GBP32 million.
An exceptional net interest charge of GBP37 million was incurred in the quarter,
being the premium on buying back US $195 million (GBP135 million) of the group's
US dollar bonds.
Goodwill amortisation was GBP3 million for the quarter (GBP5 million last year).
Earnings per share after goodwill amortisation and exceptional items were
4.5 pence compared to 5.2 pence last year reflecting the net exceptional credit
in 2002/03 relating to the sale of fixed asset investments and group
undertakings and the exit from Blu.
Net debt and cash flow
Net debt at December 31, 2003 was GBP8,795 million, 32 per cent below the third
quarter last year. Cash inflow from operating activities amounted to GBP1,038
million in the quarter. This is after making special and annual deficiency
contributions to the BT Pension Scheme of GBP362 million (GBP329 million last
year).
The net cash outflow on fixed asset purchases and sales was GBP599 million in
the quarter which compares to GBP523 million last year reflecting the rising
investment in our network transformation programme.
The cash generation in the third quarter is usually lower than the other
quarters due to the annual special and deficiency pension payment and interest
payment dates in December. Free cash flow (before acquisitions and disposals,
dividends and financing) was a net outflow of GBP68 million in the quarter
compared to an inflow of GBP19 million last year reflecting the higher capital
expenditure and the premium on the bond buy back.
The group commenced its share buyback programme in the quarter with 33 million
shares repurchased for GBP58 million. This programme is expected to continue in
the next quarter.
The group's swap portfolio which hedges foreign exchange and interest rate
exposures is being restructured. During the quarter this resulted in a
GBP117 million reduction in net debt and this restructuring activity is expected
to continue in the next quarter.
Although net debt was not impacted, the group issued a US $172 million
0.75 per cent exchangeable bond due in 2008, exchangeable into ordinary shares
of LG Telecom, BT's Korean based associate. The group also undertook a sale and
leaseback of circuit switches which had no effect on net debt but increased both
gross debt and cash by around GBP1 billion. The liability will effectively be
repaid over four years.
Customer satisfaction
BT has an extensive market research programme conducted by external agencies
which focuses on the level and causes of customer dissatisfaction. The group
achieved a further 8 percentage point improvement in the level of customer
dissatisfaction in the quarter to 18 per cent in the year to date.
Broadband
During the third quarter, additional investment enabled broadband services to be
available in exchanges serving 85 per cent of UK homes and we have plans to
increase broadband coverage to 90 per cent of UK communities by this summer. We
aim to reach a target of 100 per cent broadband coverage of every UK community
during 2005.
There was an installed base of 1.93 million Wholesale broadband lines by
February 6, 2004, three times the number of connections 12 months ago, with net
additions growing at more than 33,000 per week. The increasing base is reflected
in a 129 per cent increase in broadband revenues to GBP128 million in the
quarter.
________________________________________________________________________________
The fourth quarter and preliminary results of BT Group are expected to be
announced on May 20, 2004.
OPERATING PERFORMANCE BY LINE OF BUSINESS
Third quarter ended Group Group operating Capital
December 31, turnover profit (loss) (iii) EBITDA expenditure
2003(i) GBPm GBPm GBPm GBPm
BT Retail 3,333 366 404 32
BT Wholesale 2,682 421 902 489
BT Global
Services 1,407 (22) 133 115
Other 9 (22) 35 63
Intra-group
items (ii) (2,853) - - -
-------- -------- -------- --------
Total 4,578 743 1,474 699
======== ======== ======== ========
Nine months ended Group Group operating Capital
December 31, turnover profit (loss) (iii) EBITDA expenditure
2003 (i) GBPm GBPm GBPm GBPm
BT Retail 10,014 1,124 1,250 72
BT Wholesale 8,151 1,284 2,712 1,265
BT Global
Services 4,133 (112) 345 319
Other 20 (75) 97 173
Intra-group
items (ii) (8,586) - - -
-------- -------- -------- --------
Total 13,732 2,221 4,404 1,829
======== ======== ======== ========
(i) See note 2 on pages 21 to 25 for prior year figures.
(ii) Elimination of intra-group turnover between businesses, which is included
in the turnover of the originating business.
(iii)Before goodwill amortisation and exceptional items.
There is extensive trading between BT's lines of business and the line of
business profitability is dependent on the transfer price levels. The
intra-group trading arrangements are subject to review and changed with effect
from April 1, 2003 in certain circumstances to reflect reorganisations within
the group and regulatory changes. The comparative figures for the lines of
business have been restated to reflect these changes but there is no impact at a
group level.
The line of business commentaries refer to EBITDA, which is defined as group
operating profit before depreciation and amortisation. In addition, reference is
made to operating free cash flow, which is defined as EBITDA less capital
expenditure.
BT Retail
Third quarter ended December 31 Nine months
ended December 31
-------------------------------------- ----------------------
2003 2002* Better (worse) 2003 2002*
GBPm GBPm GBPm % GBPm GBPm
Group turnover 3,333 3,521 (188) (5) 10,014 10,328
------ ------ ------ ------
Gross margin 934 995 (61) (6) 2,804 2,955
Sales, general
and
administration
costs 530 547 17 3 1,554 1,643
------ ------ ------ ------
EBITDA 404 448 (44) (10) 1,250 1,312
Depreciation 38 46 8 17 126 153
------ ------ ------ ------
Operating profit 366 402 (36) (9) 1,124 1,159
====== ====== ====== ======
Capital
expenditure 32 25 (7) (28) 72 69
====== ====== ====== ======
Operating free
cash flow 372 423 (51) (12) 1,178 1,243
====== ====== ====== ======
*Restated to reflect changes in intra-group trading arrangements.
Growth in new wave turnover of 21 per cent was more than offset by the
9 per cent decline in the traditional turnover, resulting in an overall decline
of 5 per cent compared to the third quarter of last year.
Third quarter ended December 31 Nine months
ended December 31
-------------------------------------- ----------------------
BT Retail turnover 2003 2002* Better (worse) 2003 2002*
GBPm GBPm GBPm % GBPm GBPm
Voice Services 2,241 2,456 (215) (9) 6,816 7,268
Intermediate 587 647 (60) (9) 1,778 1,882
Products
------ ------ ------ ------
Traditional 2,828 3,103 (275) (9) 8,594 9,150
------ ------ ------ ------
ICT 390 376 14 4 1,140 1,062
Broadband 81 31 50 161 206 89
Mobility 21 9 12 133 50 23
Other 13 2 11 n/m 24 4
------ ------ ------ ------
New Wave 505 418 87 21 1,420 1,178
------ ------ ------ ------
Total 3,333 3,521 (188) (5) 10,014 10,328
====== ====== ====== ======
Sales to other BT
businesses incl. 213 256 (43) (17) 627 663
above
*Restated to reflect changes in intra-group trading arrangements.
Turnover from traditional voice services was 9 per cent lower than the third
quarter of last year.
The overall market for fixed to fixed voice call minutes is estimated to have
declined by 5 per cent compared to the third quarter of last year, partly
reflecting the migration to new wave products and services such as IPVPNs and
substitution by e-mail, instant messaging and mobile services.
BT Group's total originating measured call volumes have decreased by 5 per cent.
Internet and data related call volumes decreased by 4 per cent, being driven by
the migration to broadband which is not measured in minutes and a slow down in
the growth of flat rate internet access products. Total geographic (local,
national and international) call volumes declined by 9 per cent, largely
reflecting the decline in the market and some loss of market share to CPS. Fixed
to mobile call volumes declined by 2 per cent after having grown by 1 per cent
last quarter.
BT's market share of directory enquiries through the 118 500 service has
increased as the benefits and awareness of the quality of service and pricing,
supported by the current marketing campaign have become apparent. However,
revenues have reduced significantly year on year due to the contraction of the
market.
Turnover from intermediate products decreased by 9 per cent compared to the
third quarter of last year mainly driven by a decline in retail private circuits
and ISDN as customers migrate to cheaper partial private circuits and new wave
products including broadband and IPVPN.
New wave turnover in BT Retail continued to reflect the trend experienced in the
first half with growth of 21 per cent compared to the third quarter last year.
ICT turnover increased by 4 per cent, reflecting the growth in new IP based
services offset by a decline in business telephony equipment. Broadband turnover
has grown by 161 per cent reflecting the increased take up of broadband, with
over 796,000 BT Retail customers. In November, BT entered the consumer mobile
market with the launch of BT Mobile Home Plan in retail outlets. Total turnover
from mobile services increased by 133 per cent.
The total number of BT Retail lines, which includes voice, digital and
broadband, increased by 1 per cent to 29.6 million since December 31, 2002,
reflecting the continued growth in broadband partially offset by declining PSTN
lines.
The gross margin reduced by 0.2 percentage points to 28.0 per cent compared to
the third quarter of last year, reflecting lower prices and the changes in the
revenue mix, partly offset by lower charges from BT Wholesale, in line with
market and regulatory prices.
Cost transformation programmes have generated GBP33 million savings (7 per cent)
in the traditional business in the quarter partly offset by higher leaver costs.
Operating profit in the quarter of GBP366 million was 9 per cent lower than the
prior year. This flows through to an operating free cash flow (EBITDA less
capital expenditure) of GBP372 million in the quarter which is 12 per cent lower
than the third quarter of last year.
BT Wholesale
Third quarter ended December 31 Nine months
ended December 31
-------------------------------------- ----------------------
2003 2002* Better (worse) 2003 2002*
GBPm GBPm GBPm % GBPm GBPm
External turnover 858 889 (31) (3) 2,581 2,625
Internal turnover 1,824 1,962 (138) (7) 5,570 5,807
------ ------ ------ ------
Group turnover 2,682 2,851 (169) (6) 8,151 8,432
====== ====== ====== ======
Total operating
costs
before depreciation 1,802 1,912 110 6 5,510 5,801
Other operating
income 22 34 (12) (35) 71 94
------ ------ ------ ------
EBITDA 902 973 (71) (7) 2,712 2,725
Depreciation 481 488 7 1 1,428 1,438
------ ------ ------ ------
Operating profit 421 485 (64) (13) 1,284 1,287
====== ====== ====== ======
Capital expenditure 489 430 (59) (14) 1,265 1,174
====== ====== ====== ======
Operating free
cash flow 413 543 (130) (24) 1,447 1,551
====== ====== ====== ======
*Restated to reflect changes in intra-group trading arrangements.
Operating profit decreased by 13 per cent to GBP421 million on a 6 per cent fall
in turnover. EBITDA margin was maintained at the same level as the third quarter
last year at 34 per cent, with efficiencies offsetting the effect of a 4 per
cent increase in network volumes.
External turnover fell by GBP31 million (3 per cent) which is fully accounted
for by price reductions on mobile call termination rates which have reduced
turnover by GBP35 million, although this has no impact on profitability. In
addition, the reductions from the regulatory Network Charge Control (NCC)
pricing formulae resulted in weighted average price reductions of 6 per cent
across the basket of relevant products. The continued migration from retail
private circuits to partial private circuits has also reduced traditional
turnover.
New wave external turnover has continued to show strong growth of 52 per cent to
GBP100 million driven by the increase in broadband volumes and managed services
and completely offsets the reduction in traditional turnover after excluding the
impact of the reduced mobile termination rates.
Internal turnover in the quarter of GBP1,824 million showed a decrease of
GBP138 million (7 per cent) reflecting lower call and retail private circuit
volumes, reductions on mobile termination rates, and price reductions.
BT Wholesale has maintained the focus on managed cash costs (defined as
operating costs excluding payments to other network operators and depreciation,
plus capital expenditure). Reflecting this continued drive towards improved
operating efficiency, BT Wholesale has achieved efficiency savings of GBP79
million in the quarter and is on track to reach its target of GBP250 million for
the full year.
BT Global Services
Third quarter ended December 31 Nine months
ended December 31
-------------------------------------- ----------------------
2003 2002* Better (worse) 2003 2002*
GBPm GBPm GBPm % GBPm GBPm
Group turnover 1,407 1,296 111 9 4,133 3,891
EBITDA 133 71 62 87 345 149
Operating loss (22) (84) 62 74 (112) (296)
Capital expenditure 115 102 (13) (13) 319 293
Operating free
cash flow 18 (31) 49 n/m 26 (144)
*Restated to reflect changes in intra-group trading arrangements.
BT Global Services has produced another quarter of significantly improved
profitability and operating free cash flow. Operating losses for the quarter
were reduced by GBP62 million (74 per cent) and operating free cash flow
improved by GBP49 million to a positive GBP18 million in the quarter,
maintaining the positive trend seen in the year to date.
Turnover for the quarter rose by 9 per cent to GBP1,407 million. Solutions grew
by 14 per cent reflecting the conversion of the strong order intake over the
past twelve months into revenue. BT Syntegra produced another strong quarter's
results, with higher revenues from the UK government sector helping it to
achieve growth of 11 per cent. Global Products maintained its growth at 9 per
cent, continuing to benefit in particular from Multi Protocol Label Switching
(MPLS).
BT Syntegra won two major contracts with the Department of Health, as part of
the NHS National Programme for IT, which together are worth an expected GBP1.6
billion over the next ten years. The first contract is for the design, delivery
and management of a national patient record database and transactional messaging
service and the second is as the Local Service Provider for London. Orders for
the Solutions business amounted to GBP0.7 billion in the third quarter. Total
Solutions and BT Syntegra long term contract wins for the last 12 months amount
to GBP6.3 billion compared to an annual turnover of around GBP3.4 billion. These
contracts will provide the base for future growth.
EBITDA increased by 87 per cent from the third quarter of last year to GBP133
million. Higher turnover, together with lower network, selling, general and
administration costs following continuing cost reduction initiatives helped
generate a 74 per cent reduction in operating losses. The majority of this
improvement is evident in the global products and global carrier businesses.
Global Services' transformation is continuing and it offers the group
significant growth opportunities through its international network centric
solution and systems integration capabilities. The group will continue to invest
in operating and capital expenditure to build on this strong position and
realise these opportunities.
________________________________________________________________________________
GROUP PROFIT AND LOSS ACCOUNT
for the three months ended December 31, 2003
________________________________________________________________________________
Before goodwill Goodwill Total
amortisation and amortisation and
exceptional items exceptional items
(note 6)
(unaudited) Notes GBPm GBPm GBPm
--------------------------------------------------------------------------------
Group turnover 2, 4 4,578 - 4,578
Other
operating
income 37 - 37
Operating
costs 3 (3,872) (3) (3,875)
------ ------ ------
Group
operating
profit (loss) 2 743 (3) 740
Group's share
of operating
profits of
associates and
joint ventures 4 5 - 5
------ ------ ------
Total
operating
profit (loss) 748 (3) 745
Profit on sale
of fixed asset
investments
and group
undertakings 5 - 33 33
Profit on sale
of property
fixed assets 1 - 1
Net interest
payable 7 (223) (37) (260)
------ ------ ------
Profit (loss)
before
taxation 526 (7) 519
Taxation (144) 11 (133)
------ ------ ------
Profit after
taxation and
attributable
to
shareholders 382 4 386
====== ====== ======
Earnings per
share 8
- basic 4.4p 4.5p
====== ======
- diluted 4.4p 4.4p
====== ======
________________________________________________________________________________
GROUP PROFIT AND LOSS ACCOUNT
for the three months ended December 31, 2002
--------------------------------------------------------------------------------
Before goodwill Goodwill Total
amortisation and amortisation and
exceptional items exceptional items
(note 6)
(unaudited) Notes GBPm GBPm GBPm
--------------------------------------------------------------------------------
Group turnover 2, 4 4,701 - 4,701
Other
operating
income 52 - 52
Operating
costs 3 (3,995) (203) (4,198)
----- --- -----
Group
operating
profit (loss) 2 758 (203) 555
Group's share
of operating
profits of
associates and
joint ventures 4 47 150 197
Total ------ ------ ------
operating
profit (loss) 805 (53) 752
Profit on sale
of fixed asset
investments
and group
undertakings - 99 99
Profit on sale
of property
fixed assets 1 - 1
Net interest
payable 7 (285) - (285)
------ ------ ------
Profit before
taxation 521 46 567
Taxation (167) 51 (116)
------ ------ ------
Profit after
taxation 354 97 451
Minority
interests 1 (7) (6)
Profit ------ ------ ------
attributable
to
shareholders 355 90 445
====== ====== ======
Earnings per
share 8
- basic 4.1p 5.2p
====== ======
- diluted 4.1p 5.1p
====== ======
GROUP PROFIT AND LOSS ACCOUNT
for the nine months ended December 31, 2003
--------------------------------------------------------------------------------
Before goodwill Goodwill Total
amortisation and amortisation and
exceptional items exceptional items
(note 6)
(unaudited) Notes GBPm GBPm GBPm
--------------------------------------------------------------------------------
Group turnover 2, 4 13,732 - 13,732
Other
operating
income 133 - 133
Operating
costs 3 (11,644) (9) (11,653)
------- ------- -------
Group
operating
profit (loss) 2 2,221 (9) 2,212
Group's share
of operating
losses of
associates and
joint ventures 4 (2) - (2)
------- ------- -------
Total
operating
profit (loss) 2,219 (9) 2,210
Profit on sale
of fixed asset
investments
and group
undertakings 5 - 32 32
Profit on sale
of property
fixed assets 2 - 2
Net interest
payable 7 (664) (55) (719)
------- ------- -------
Profit (loss)
before
taxation 1,557 (32) 1,525
Taxation (445) 27 (418)
------- ------- -------
Profit (loss)
after taxation 1,112 (5) 1,107
Minority
interests 7 - 7
------- ------- -------
Profit (loss)
attributable
to
shareholders 1,119 (5) 1,114
======= =======
Dividends (278)
-------
Retained
profit for the
period 836
=======
Earnings per
share 8
- basic 13.0p 12.9p
======= =======
- diluted 12.9p 12.8p
======= =======
GROUP PROFIT AND LOSS ACCOUNT
for the nine months ended December 31, 2002
--------------------------------------------------------------------------------
Before goodwill Goodwill Total
amortisation and amortisation and
exceptional items exceptional items
(note 6)
(unaudited) Notes GBPm GBPm GBPm
--------------------------------------------------------------------------------
Group turnover 2, 4 13,949 - 13,949
Other
operating
income 148 - 148
Operating
costs 3 (12,040) (214) (12,254)
------- ------- -------
Group
operating
profit (loss) 2 2,057 (214) 1,843
Group's share
of operating
profits of
associates and
joint ventures 4 162 150 312
------- ------- -------
Total
operating
profit (loss) 2,219 (64) 2,155
Profit on sale
of fixed asset
investments
and group
undertakings - 165 165
Profit on sale
of property
fixed assets 7 - 7
Amounts
written off
investments (7) - (7)
Net interest
payable 7 (880) - (880)
------- ------- -------
Profit before
taxation 1,339 101 1,440
Taxation (439) 51 (388)
------- ------- -------
Profit after
taxation 900 152 1,052
Minority
interests (10) (7) (17)
------- ------- -------
Profit
attributable
to
shareholders 890 145 1,035
======= =======
Dividends (194)
-------
Retained
profit for the
period 841
=======
Earnings per
share 8
- basic 10.3p 12.0p
======= =======
- diluted 10.3p 12.0p
======= =======
GROUP CASH FLOW STATEMENT
for the three months and nine months ended December 31, 2003
--------------------------------------------------------------------------------
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
(unaudited) GBPm GBPm GBPm GBPm
--------------------------------------------------------------------------------
Net cash inflow from operating
activities* (note 9) 1,038 1,041 3,821 3,776
Dividends from associates and
joint 2 3 3 4
ventures
Net cash outflow for returns on
investments and servicing of (333) (372) (792) (978)
finance
Taxation paid (176) (130) (185) (276)
-------- --------- --------- ---------
Purchase of tangible fixed (680) (635) (1,882) (1,904)
assets
Net sale of fixed asset 66 87 127 88
investments
Sale of tangible fixed assets 15 25 43 67
-------- --------- --------- ---------
Net cash outflow for capital
expenditure and financial (599) (523) (1,712) (1,749)
investments
--------------------------------------------------------------------------------
Free cash (outflow) inflow
before acquisitions, disposals
and dividends (68) 19 1,135 777
--------------------------------------------------------------------------------
-------- --------- --------- ---------
Acquisitions (23) (12) (28) (139)
Disposals - 210 1 338
-------- --------- --------- ---------
Net cash (outflow) inflow for
acquisitions and disposals (23) 198 (27) 199
Equity dividends paid - - (368) (173)
-------- --------- --------- ---------
Cash (outflow) inflow before
use of
liquid resources and financing (91) 217 740 803
Management of liquid resources (235) (467) 266 650
-------- --------- --------- ---------
Issue of ordinary share capital - - - 42
Repurchase of ordinary share (58) - (58) -
capital
New loans 1,320 - 1,320 20
Repayment of loans (884) (46) (2,035) (1,513)
Net movement on short-term - - - (64)
borrowings -------- --------- --------- ---------
Net cash inflow (outflow) from
financing 378 (46) (773) (1,515)
-------- --------- --------- ---------
Increase (decrease) in cash 52 (296) 233 (62)
======== ========= ========= =========
Increase (decrease) in net debt
from
cash flows (note 10) 149 (217) (682) (845)
======== ========= ========= =========
-------------------------------------------------------------------------------
*Net of deficiency and special
pension contributions 362 329 362 329
-------- --------- --------- ---------
GROUP BALANCE SHEET
at December 31, 2003
--------------------------------------------------------------------------
December 31 March 31
2003 2002 2003
(unaudited)
GBPm GBPm GBPm
--------------------------------------------------------------------------
Fixed assets
Intangible assets 184 219 218
Tangible assets 15,460 15,829 15,888
Investments 402 754 555
------ ------ ------
16,046 16,802 16,661
Current assets
Stocks 95 92 82
Debtors 5,301 5,473 5,043
Investments 6,236 3,951 6,340
Cash at bank and in hand 124 88 91
-------- --------- ---------
11,756 9,604 11,556
-------- --------- ---------
Creditors: amounts falling due within one
year
Loans and other borrowings 2,372 2,326 2,548
Other creditors 6,852 6,484 7,132
-------- --------- ---------
9,224 8,810 9,680
-------- --------- ---------
Net current assets 2,532 794 1,876
-------- --------- ---------
Total assets less current liabilities 18,578 17,596 18,537
======== ========= =========
Creditors: amounts falling due after more
than one year
Loans and other borrowings 12,783 14,630 13,456
Provisions for liabilities and charges
(note 11) 2,325 2,507 2,376
Minority interests 50 70 63
Capital and reserves (note 12)
-------- --------- ---------
Called up share capital 432 434 434
Reserves 2,988 (45) 2,208
-------- --------- ---------
Total equity shareholders' funds 3,420 389 2,642
-------- --------- ---------
18,578 17,596 18,537
======== ========= =========
--------------------------------------------------------------------------
NOTES
1 Basis of preparation
The unaudited interim results of BT Group, which are not statutory accounts,
have been prepared on the basis of the accounting policies as set out in the
report and accounts of BT Group plc for the year ended March 31, 2003. Figures
for the year ended March 31, 2003 are extracts from the group accounts for that
year.
The group accounts for the year ended March 31, 2003, on which the auditors
issued an unqualified report which did not contain a statement under Section 237
(2) or (3) of the Companies Act 1985, have been delivered to the Registrar of
Companies.
2 Results of businesses
The tables below show the results of BT's lines of business. There is extensive
trading between many of the business units and profitability is dependent on the
transfer price levels. These intra-group trading arrangements are subject to
review and have changed in certain instances. Comparative figures have been
restated for these changes but there is no impact at a group level. The
eliminations are intra-group eliminations.
With effect from January 1, 2003 the operations of BT Openworld were transferred
under the management control of BT Retail. The comparative figures have been
restated to report BT Openworld as part of BT Retail for all the periods under
review.
(a) Operating results Group
operating
External Internal Group profit (loss) EBITDA
turnover turnover turnover (iii) (iii)
GBPm GBPm GBPm GBPm GBPm
Third quarter
ended
December 31, 2003
BT Retail 3,120 213 3,333 366 404
BT Wholesale 858 1,824 2,682 421 902
BT Global
Services 591 816 1,407 (22) 133
Other 9 - 9 (22) 35
Intra-group
items (ii) - (2,853) (2,853) - -
------ ----- ------ ----- -----
Total 4,578 - 4,578 743 1,474
====== ===== ====== ===== =====
Third quarter
ended
December 31, 2002 (i)
BT Retail 3,265 256 3,521 402 448
BT Wholesale 889 1,962 2,851 485 973
BT Global
Services 537 759 1,296 (84) 71
Other 10 1 11 (45) 21
Intra-group
items (ii) - (2,978) (2,978) - -
------ ----- ------ ----- -----
Total 4,701 - 4,701 758 1,513
====== ===== ====== ===== =====
Nine months ended
December 31, 2003
BT Retail 9,387 627 10,014 1,124 1,250
BT Wholesale 2,581 5,570 8,151 1,284 2,712
BT Global
Services 1,745 2,388 4,133 (112) 345
Other 19 1 20 (75) 97
Intra-group
items (ii) - (8,586) (8,586) - -
------ ----- ------ ----- -----
Total 13,732 - 13,732 2,221 4,404
====== ===== ====== ===== =====
Nine months ended
December 31, 2002 (i)
BT Retail 9,665 663 10,328 1,159 1,312
BT Wholesale 2,625 5,807 8,432 1,287 2,725
BT Global
Services 1,623 2,268 3,891 (296) 149
Other 36 1 37 (93) 108
Intra-group
items (ii) - (8,739) (8,739) - -
------ ----- ------ ----- -----
Total 13,949 - 13,949 2,057 4,294
------ ----- ------ ----- -----
(i) The results of the lines of business for the quarter ended December 31,
2002 and the nine months ended December 31, 2002 have been restated to
reflect changes to intra-group trading arrangements.
(ii) Elimination of intra-group turnover between businesses, which is included
in the total turnover of the originating business.
(iii)Before goodwill amortisation and exceptional items.
BT Global Services analysis
Third quarter Nine months
ended December 31 ended December 31
2003 2002 Better (worse) 2003 2002
-----------------------------------------------------
GBPm GBPm GBPm % GBPm GBPm
Group turnover
Solutions 685 602 83 14 1,980 1,724
Syntegra 162 146 16 11 468 431
Global Products 468 429 39 9 1,344 1,230
Global Carrier 244 223 21 9 710 706
Other and eliminations (152) (104) (48) (46) (369) (200)
----- ----- ----- -----
1,407 1,296 111 9 4,133 3,891
===== ===== ===== =====
EBITDA
Solutions 80 78 2 3 218 213
Syntegra 11 11 - - 20 19
Global Products 29 (10) 39 n/m 77 (60)
Global Carrier 40 27 13 48 112 99
Other (i) (27) (35) 8 23 (82) (122)
----- ----- ----- -----
133 71 62 87 345 149
===== ===== ===== =====
Operating profit (loss)
(ii)
Solutions 61 60 1 2 161 159
Syntegra 9 9 - - 14 12
Global Products (68) (108) 40 37 (212) (347)
Global Carrier 18 5 13 260 45 33
Other (i) (42) (50) 8 16 (120) (153)
----- ----- ----- -----
(22) (84) 62 74 (112) (296)
===== ===== ===== =====
Capital expenditure 115 102 (13) (13) 319 293
===== ===== ===== =====
Operating free cash flow 18 (31) 49 n/m 26 (144)
===== ===== ===== =====
(i) Other is after charging leaver costs of GBP6m in the third quarter (GBP7m
last year) and GBP19m in the nine months ended December 31, 2003 (GBP46m
last year).
(ii) Before goodwill amortisation.
2 Results of businesses continued
(b) Group turnover analysis
Third quarter Nine months
ended December 31 ended December 31
-------------------------- ---------------------------------
2003 2002 Better 2003 2002 Better
(worse) (worse)
GBPm GBPm % GBPm GBPm %
Traditional 3,740 4,059 (8) 11,423 12,118 (6)
New wave 838 642 31 2,309 1,831 26
----- ----- ------ ------
4,578 4,701 (3) 13,732 13,949 (2)
===== ===== ====== ======
Consumer 1,505 1,545 (3) 4,500 4,558 (1)
Business 636 677 (6) 1,940 2,050 (5)
Major Corporate 1,414 1,445 (2) 4,257 4,260 -
Wholesale/Carrier 1,014 1,024 (1) 3,016 3,045 (1)
Other 9 10 (10) 19 36 (47)
----- ----- ------ ------
4,578 4,701 (3) 13,732 13,949 (2)
----- ----- ------ ------
Note: New wave includes the external new wave turnover of BT Retail (ICT,
broadband, mobility and classified directories) and BT Wholesale
(broadband and managed services) and the external turnover of Global
Solutions and BT Syntegra.
Consumer includes the external turnover of BT Retail from consumer
customers. Business includes the external turnover of BT Retail from SME
customers.
Major Corporate includes the external turnover of BT Retail from major
corporate customers and the external turnover of BT Global Services, with
the exception of Global Carrier.
Wholesale/Carrier includes the external turnover of BT Wholesale and
Global Carrier.
(c) Capital expenditure on plant, equipment and motor vehicle additions
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
GBPm GBPm GBPm GBPm
BT Retail 32 25 72 69
BT Wholesale
Access 270 222 717 636
Switch 37 52 70 134
Transmission 49 55 149 179
Products/systems support 133 101 329 225
--- --- ----- -----
489 430 1,265 1,174
BT Global Services
Syntegra and Solutions 19 12 80 36
UK Networks 33 25 92 84
Other 63 65 147 173
--- --- ----- -----
115 102 319 293
Other (including fleet and
property) 63 56 173 185
--- --- ----- -----
Total 699 613 1,829 1,721
--- --- ----- -----
2 Results of businesses continued
(d) Net operating assets (liabilities)
December 31 March 31
2003 2003
GBPm GBPm
BT Retail 65 (430)
BT Wholesale 11,965 12,041
BT Global Services 1,467 1,912
Other 383 217
------ ------
Total 13,880 13,740
------ ------
Note: Net operating assets (liabilities) comprise tangible and intangible fixed
assets, stocks, debtors less creditors (excluding loans and other borrowings)
and provisions for liabilities and charges (excluding deferred tax).
3 Operating costs
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
GBPm GBPm GBPm GBPm
Net staff costs before leaver costs 865 831 2,658 2,560
Leaver costs 26 12 53 205
----- ------ ------- -------
Net staff costs 891 843 2,711 2,765
Depreciation 731 754 2,181 2,234
Payments to telecommunication
operators 905 973 2,928 2,952
Other operating costs 1,345 1,425 3,824 4,089
----- ------ ------- -------
Total before goodwill amortisation 3,872 3,995 11,644 12,040
and exceptional items
Goodwill amortisation 3 5 9 16
Exceptional items - 198 - 198
----- ------ ------- -------
Total 3,875 4,198 11,653 12,254
----- ------ ------- -------
4 Group's share of associates and joint ventures
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
GBPm GBPm GBPm GBPm
Share of associates and joint
ventures turnover 98 423 304 1,267
== === === =====
Share of operating profits (losses)
before goodwill amortisation and
exceptional items 5 47 (2) 162
Impairment of associates and joint
ventures and release of related
costs - 150 - 150
-- --- --- -----
Total share of operating profits
(losses) of associates and joint
ventures 5 197 (2) 312
-- --- --- -----
5 Profit on sale of fixed asset investments and group undertakings During the
quarter the group's principal disposal was its 7.8% interest in Inmarsat
Ventures plc for total cash consideration of $118m (GBP67m) realising a profit
on disposal of GBP32m.
6 Exceptional items and goodwill amortisation
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
GBPm GBPm GBPm GBPm
Profit on sale of fixed asset
investments and group undertakings 33 99 32 165
Property rationalisation costs - (198) - (198)
Impairment of other investments and
release for related costs - 150 - 150
Net interest payable (37) - (55) -
Goodwill amortisation (3) (5) (9) (16)
-- --- -- ---
Net (charge) credit before tax and
minority interests (7) 46 (32) 101
-- --- -- ---
7 Net interest payable
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
GBPm GBPm GBPm GBPm
Group 315 322 955 1,000
Joint ventures and associates 4 5 14 21
--- --- --- -----
Total interest payable 319 327 969 1,021
Interest receivable (59) (42) (250) (141)
--- --- --- -----
Net interest payable 260 285 719 880
=== === === =====
Analysed:
Before exceptional items 223 285 664 880
Exceptional items 37 - 55 -
--- --- --- -----
Total 260 285 719 880
--- --- --- -----
8 Earnings per share
The basic earnings per share are calculated by dividing the profit
attributable to shareholders by the average number of shares in issue after
deducting the company's shares held by employee share ownership trusts. In
calculating the diluted earnings per share, share options outstanding and
other potential ordinary shares have been taken into account.
The average number of shares in the periods were:
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
million of shares million of shares
Basic 8,629 8,623 8,629 8,614
Diluted 8,682 8,656 8,686 8,653
9 Reconciliation of operating profit to operating cash flow
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
GBPm GBPm GBPm GBPm
Group operating profit 740 555 2,212 1,843
Depreciation and amortisation 734 760 2,192 2,253
Changes in working capital (79) (147) (290) (313)
Provision movements, pensions
and other (357) (127) (293) (7)
----- ----- ----- -----
Net cash inflow from operating
activities 1,038 1,041 3,821 3,776
----- ----- ----- -----
10 Net debt
(a) Analysis
At December 31 At March 31
2003 2002 2003
GBPm GBPm GBPm
Long-term loans and other borrowings falling
due after more than one year 12,783 14,630 13,456
Short-term borrowings and long-term loans and
other borrowings falling due within one year 2,372 2,326 2,548
------ ------ ------
Total debt 15,155 16,956 16,004
Short-term investments (6,236) (3,951) (6,340)
Cash at bank (124) (88) (91)
------ ------ ------
Net debt at end of period 8,795 12,917 9,573
------ ------ ------
10 Net debt continued
(b) Reconciliation of net cash flow to movement in net debt
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
GBPm GBPm GBPm GBPm
Net debt at beginning of period 8,768 13,112 9,573 13,701
Increase (decrease) in net debt
resulting from cash flows 149 (217) (682) (845)
Net debt assumed or issued on
acquisitions - - - (13)
Currency and other movements (13) 15 (11) 32
Other non-cash movements (109) 7 (85) 42
----- ------ ----- ------
Net debt at end of period 8,795 12,917 8,795 12,917
----- ------ ----- ------
11 Provisions for liabilities and charges
At December 31 At March 31
2003 2002 2003
GBPm GBPm GBPm
Deferred taxation 2,017 2,146 2,017
Pension provisions (a) 32 33 33
Other provisions 276 328 326
----- ----- -----
2,325 2,507 2,376
----- ----- -----
(a) The pension prepayment relating to the BT Pension Scheme of GBP787m at
December 31, 2003 (GBP560m last year) is included in debtors and falls due
after more than one year.
12 Share capital and reserves
Share capital Reserves Total
GBPm GBPm GBPm
Balances at April 1, 2003 434 2,208 2,642
Repurchase of share capital (2) (56) (58)
Profit for the nine months ended December
31, 2003 - 1,114 1,114
Dividend - (278) (278)
--- ----- -----
Balances at December 31, 2003 432 2,988 3,420
--- ----- -----
13 Earnings before interest, taxation, depreciation and amortisation (EBITDA)
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
GBPm GBPm GBPm GBPm
Group operating profit before
exceptional items 740 753 2,212 2,041
Depreciation 731 755 2,183 2,237
Amortisation 3 5 9 16
----- ----- ----- -----
EBITDA before exceptional items 1,474 1,513 4,404 4,294
----- ----- ----- -----
14 United States Generally Accepted Accounting Principles
The results set out above have been prepared in accordance with accounting
principles generally accepted in the United Kingdom. The table below sets
out the results calculated in accordance with United States Generally
Accepted Accounting Principles.
Third quarter Nine months
ended December 31 ended December 31
2003 2002 2003 2002
Net income attributable to 132 422 510 1,147
shareholders (GBPm) including
exceptional items
Earnings per ADS (GBP)
- basic 0.15 0.49 0.59 1.33
- diluted 0.15 0.49 0.59 1.33
Each American Depositary Share (ADS) represents 10 ordinary shares of BT Group
plc.
Shareholders' equity, calculated in accordance with United States Generally
Accepted Accounting Principles, is GBP2,484m deficit at December 31, 2003
(December 31, 2002 - GBP3,601m, March 31, 2003 - GBP2,258m).
Forward-looking statements - caution advised
Certain statements in this results release are forward-looking and are made in
reliance on the safe harbour provisions of the US Private Securities Litigation
Reform Act of 1995. These statements include, without limitation, those
concerning: cash flow, earnings per share and customer satisfaction targets;
expectations regarding broadband growth, provision of new technology and
services with greater capabilities and lower costs, and revenues from new wave
products and services; the possible or assumed future results of operations of
BT and/or its lines of business; expectations regarding revenue growth, debt
reduction and growing shareholder value by investing for the future and more
effectively managing the balance sheet; and cost efficiencies and delivery of
sustainable cash savings.
Although BT believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that these expectations will
prove to have been correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements.
Factors that could cause differences between actual results and those implied by
the forward-looking statements include, but are not limited to: material adverse
changes in economic conditions in the markets served by BT and its lines of
business; future regulatory actions and conditions in BT's operating areas,
including competition from others in the UK and other international
communications markets; selection by BT and its lines of business of the
appropriate trading and marketing models for its products and services;
fluctuations in foreign currency exchange rates and interest rates;
technological innovations, including the cost of developing new products and the
need to increase expenditures for improving the quality of service; prolonged
adverse weather conditions resulting in a material increase in overtime, staff
or other costs; developments in the convergence of technologies; the anticipated
benefits and advantages of new technologies, products and services, including
broadband and other new wave initiatives, not being realised; the timing of
entry and profitability of BT and its lines of business in certain communication
markets; significant changes in market shares for BT and its principal products
and services; to the extent that BT chooses to sell assets or minority interests
in its subsidiaries, prevailing market levels for such sales; general financial
market conditions affecting BT's performance. BT undertakes no obligation to
update any forward-looking statements whether as a result of new information,
future events or otherwise.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BT Group PLC
(Registrant)
By: /s/ Patricia Day
--------------------
Patricia Day, Assistant Secretary. Head of Shareholder Services
Date 12 February, 2004