Tag: BT Group

When Your Internet Goes Down

This morning I learned how dependent we are now on the Internet. My hub (router) power plug loosened so it lost power. So I was out of action for about 12 hours. Blood pressure rose in response until I identified the problem.

You might say, was that not easy to identify? No it was not as I have multiple BT boxes on my desk and I thought my gardener might have cut through the cable when planting a new rose yesterday. It’s now taken a few hours to catch up with my emails (I can pick them up on my phone but it’s tedious to do so, particularly if I need to reply).

BT support was quite bad – expecting me to log into a support service on the web. What do people do if they don’t have access by other means if their main internet connection fails? It seems impossible to speak to someone.

I think it might be time for me to fire BT and switch to another internet provider. Please advise any recommendations.

The moral is make sure you have a back-up system for accessing the internet.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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BT Results and Move to Fibre

BT Group (BT.A) announced their final results for the year ending March this morning. The share price is up 11% at the time of writing, perhaps mainly based on the positive comments of the CEO. Although revenue was pretty well unchanged and pre-tax profit fell. EPS was down 55% as was free cash flow. Net debt rose to £19.5bn and the massive pension deficit also increased.

The CEO said: “This delivery and greater capex efficiency gives us the confidence to provide new guidance for significantly increased short term cash flow and sets out a path to more than double our normalised free cash flow over the next five years. This enhanced cash flow allows us to increase our dividend for FY24 by 3.9% to 8.0 pence per share. We’re also setting a further £3bn of gross annualised cost savings to be reached by the end of FY29”.

The dividend increase means the yield is 6.3% on the current share price, which may be one of the few reasons to buy the shares. This is clearly a no growth business. This is the comment made on Stockopedia: “Huge net debt and giant pension contributions mean that the balance sheet has negative NTAV. Should it be paying such generous divis, when it has a mountain of debt?”. My answer would be NO.

The company is moving rapidly to replace its copper wires by fibre-optic cables and coincidentally BT changed our home/office broadband/phone line to fibre yesterday. They did not have to dig up too much of the garden. That went very smoothly so far although the phone line is still not working. Use the Roliscon contact page if you need to get an email to me: https://www.roliscon.com/contact-us

We also have a fibre service from Virgin to support our home TV service and home phone. The TV service suffered from picture break-up for the last three weeks and was only fixed a couple of days ago. I have complained and asked for a subscription refund particularly as they have become too expensive. Alternative suggestions would be welcomed.

Broadband and phone providers have been ratcheting up prices by having automatic increases to match retail price inflation in their contracts which I find unjustifiable as their costs don’t increase in that way.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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BT Problems, Hotel Chocolat and Multibaggers Report

BT has managed to disable my business “landline” number of 020-8295-0378. Major network problem apparently which won’t be fixed until at least 24/11/2023. Even though this is the line used for my broadband service that is still working so anyone wanting to contact me should use this contact form to get in touch: https://www.roliscon.com/contact-us

Will I be buying shares in BT? Absolutely not when the service is so poor.

Despite my previous recent blog post on the dangers of the attractions of luxury food products (see https://roliscon.blog/2023/10/16/hotel-chocolat-and-luxury-products/ ) it has not deterred Mars from bidding for Hotel Chocolat (HOTC). They have offered to pay 160% of the previous market price which is a prospective p/e of over 190. This seems a wildly optimistic valuation for a retailer with no consistent record of profits.  

Stockopedia ran a webinar on “multibaggers” which I missed as the timing clashed with my usual dinner time. But they have produced a report on their research of UK stocks which you can obtain from their web site.

I hold two of the top ten winners over the last ten years which have certainly contributed to my portfolio performance and it is well worth reading their report.

We seem to be back in a political mess after Suella Braverman got fired and the Supreme Court rejected the Rwanda plan for migrants. That was always going to be legally and politically difficult without a very firm hand on the tiller which Rishi Sunak seems unable to provide. Moving illegal immigrants to a foreign country was never going to be easy. But Rwanda is surely not the best choice of location. How about St. Helena or Ascension or one of the remote Scottish islands instead?

As regards the bust-up in the Conservative Party as a result, as someone who has some experience of such events in membership organisations my advice to Suella is to act quickly. Removing Sunak would not be easy so best to form a new platform for like-minded right wingers.   

Roger Lawson (Twitter https://twitter.com/RogerWLawson  )

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BT Nationalisation and Promises, Promises

We are clearly in a run up to a General Election when politicians promise all kinds of “free” gifts to the electorate. The latest promise, even before the manifestos have been published, is the Labour Party’s commitment to give everyone in the UK free broadband. This would be achieved by simply nationalising BT Group (BT.A) apparently.

I just had a quick look at the cost of this commitment. BT actually receives over £15 billion annually according to the last accounts from Consumers and from Openreach. There is some profit margin on that of less than 20% which might be discounted, but there are many households who do not yet have a fibre connection so that would be an additional cost to be covered by the Government.

In addition there would probably be some cost of nationalising BT Group and paying compensation to shareholders. The current market cap of the company is about £19 billion. They might get away with paying £10 billion up front but the annual cost of at least £12 billion to maintain the network would be an enormous burden on the state. They might be able to raise that by taxing multinationals or others but it still makes no sense.

I am not a BT shareholder currently although I am one of their customers. I also remember how dreadful the service from BT was before it was nationalised. It may not be perfect now in comparison with some of their competitors but nationalised industries such as telecoms, the railways, the motor industry, the coal industry, shipbuilding, the gas/electric/water utilities and about 40 others were all abject failures. They typically lost money and provided diabolical service.  The young who are voting socialist may not remember but Jeremy Corbyn should do so.

The fact that the share price of BT only dropped by 1% today (at the time of writing) just shows you how much credibility investors attach to this promise. It also surely shows how desperate the Labour Party is to win some more votes as they are now trailing well behind in the opinion polls.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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