Footsie Higher After BT CEO Signals Continuity

The telecommunications giant BT issued a trading statement alongside the appointment of its new CEO, Allison Kirkby. Kirkby signalled her intention to continue the company's strategic direction in the statement.

Positive Reaction Primarily Attributed to Openreach

Prior to the BOE's monetary policy decision, the FTSE 100 index was trading higher partly due to BT's performance. The company's share price opened with an over 2% increase after reporting a 3% rise in quarterly revenue, aided by price increases. The freshly inaugurated CEO reaffirmed the company's full-year financial guidance, instilling confidence in investors regarding BT's strategic continuity. Despite the influence of macroeconomic factors later swayed the index and BT's share price, the market's initial reaction to the announcement was positive.

BT has heavily emphasised the deployment of fibre-to-the-premises (FTTP) technology. In the previous quarter, it was noted that additional connections totalled 73000 weekly, and fibre clientele surged by 46%. The subordinate wholesale unit of BT Group, Openreach, experienced a more robust climb in revenue and a 10% rise in the average revenue per user (ARPU), a significant leap over the 5% witnessed in BT's consumer broadband segment, underpinning the division's crucial role.

Continued Cost Optimisation But Unclear Future

Assuming the CEO's mantle on the trading statement date, Kirkby stepped into the shoes previously filled by Philip Jansen. Her initial actions suggest maintaining the existing strategy, focusing on "the next stage of development". BT will likely continue cost-cutting measures to offset inflation, having grown adjusted EBITDA in line with revenue. Pretax profit increased 15% to £1.5 billion for the period.

As is customary for a trading update, BT provided limited forward guidance. While cost initiatives are positive, investors will want to see new growth drivers to improve shareholder returns. The share price has fallen nearly 30% since the last annual report, and BT Group's full-year results may provide greater strategic clarity.​

Footsie Might Have Ended Triangle Pattern

The FTSE 100 index closed higher the day after being rejected by the 7600 local support, increasing the probability of a triangle pattern completing formation at 7400. Should buyers regain 7765 and 7940 with conviction, the index may reach fresh record highs, surpassing 8045. Alternatively, a break below the 7550 support could alter market dynamics, bringing lower levels at 7430 and the triangle pattern's lower trendline into greater focus if support is lost.

Source:SpreadEx/ UK 100

Key Takeaways

BT announced its latest financial results and the appointment of a new CEO, Allison Kirkby. Kirkby intends to continue the existing strategy, focusing on fibre broadband rollout and cost-cutting. BT's revenue rose 3%, aided by price hikes, and pretax profit increased 15% to £1.5 billion. The new CEO reaffirmed full-year guidance to reassure investors. BT's share price opened up over 2% on the news, supporting Footise higher, though it remains nearly 30% lower since the last annual results. Investors will want new growth drivers from the new CEO to improve returns.