Review of a Telecommunication Services and a Multi-Utilities Stock

BT Group

London, the United Kingdom-based company, BT Group PLC (LON: BT.A) is a Fixed-line telecommunication services provider. The company offers fibre and copper connectivity for homes, businesses and exchanges.

BT Group acquire exclusive rights for UEFA

The company released a press release on 15th November 2019, according to which, BT Sport has exclusive rights of all topflight European club football until 2024. The company has acquired exclusive rights to all 420 games of the UEFA (Union of European Football Associations) Champions League, UEFA Europa League and the new UEFA Europa Conference League for further three seasons.

This time there are a higher number of games, an increase of 77 games as compared to the previous deal and will also provide in-match clips and highlights, to commence in 2021. The company is focusing on finding more mediums to increase the number of viewing options and is delighted to continue being the home of UEFA Champions League in the United Kingdom.

Furthermore, the company shall release its third-quarter results for 2019/20 on 30^th January 2020.

BT.A-Business performance for H1 FY20

(Source: London Stock Exchange)

The company’s revenue (reported) was down by 1 per cent to £11,467 million due to changes in the regulatory environment further exacerbated by a shift away from legacy products and reduced margins in business. The company’s profit before taxation (reported) remained flat year on year, was recorded at £1,333 million in H1 FY20. The company’s adjusted EBITDA was down by 3 per cent to £3,923 million in H1 FY20 due to lower revenues, rise in spectrum fees, content-related costs. The net cash inflow from operating activities stood at £2,173 million in H1 FY20. The company’s normalised free cash flow was down by 38 per cent to £604 million due to the rise in capital expenditure, interest and tax payments. The capital expenditure of the company stood at £1,882 million in H1 FY20. The company’s net debt increased to £6.1 billion, due to adoption of IFRS 16. The company’s net business cash outflows stood at £1.2 billion. The company’s interim dividend stood at 4.62 pence per share. The company maintained its overall financial outlook.

The company recently unveiled new products for business and consumer segments, which comprise of BT Mobile 5G and the new Halo converged product plans.

BT.A-Share price performance

Daily Chart as on 26-November-19, before the market closed (Source: Thomson Reuters)

On 26th November 2019, while writing at 11:18 AM GMT, BT.A shares were clocking a current market price of GBX 190.44 per share; which was less by 0.81 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £18.87 billion at the time of writing.

On 28^th November 2018, the shares of BT.A have touched a new peak of GBX 268.00 and reached the lowest price level of GBX 157.67 on 27th August 2019 in the last 52 weeks. The company’s shares were trading at 28.94 per cent lower from the 52-week high price mark and 20.78 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 3,105,266 at the time of writing before the market close. The company’s 5-day stock's daily average traded volume was 16,973,240.60; 30 days daily average traded volume- 22,892,851.60- and 90-days daily average traded volume – 22,911,819.14. The stock has lesser volatility in comparison to the benchmark index as the beta stood at 0.80, along with a dividend yield of 8.02 per cent.

The shares of the company have delivered a positive return of 20.80 per cent in the last quarter. The company’s stock plunged by 19.36 per cent from the start of the year to till date. The company’s stock has given investors 25.07 per cent of a negative return in the last year.Â

National Grid PLC

National Grid Plc (LON: NG.) is the United Kingdom-based global electricity and gas company engaged in the transmission and distribution of electricity and gas. The company operates in the UK, US and North Eastern countries.

NG.-Recent developments

The State of New York and National Grid Plc have entered into an agreement, according to which the latter will to lift its natural gas moratorium for all customers in Brooklyn, Queens and Long Island for approximately the next two years with immediate effect. The company shall commence processing new applications which were on hold earlier. It has also agreed to develop the necessary framework, which is required to resolve the energy supply issues in the longer term. National Grid has committed to present options to meet New York's long-term gas supply needs within three months. National Grid shall offer US$7 million for customer support to take care of bottlenecks arising from the moratorium, as a part of this agreement. In addition, the company would be investing US$8 million for energy efficiency programs and will make an additional investment of US$20 million in clean energy projects.

NG.- Business performance for H1 FY20

(Source: London Stock Exchange)

The company’s revenue stood at £6,289 million in first half of the fiscal year 2020. The company’s underlying operating profit was up by 1 per cent to £1.3 billion in the first half of the fiscal year 2020 due to an increase in the US Regulated profits. The company’s statutory operating profit was down by 1 per cent to £1 billon due to adverse timing. Due to a US tax settlement related to prior periods, the company’s underlying EPS was up by 2 per cent to 20 pence per share. The company’s statutory EPS was down by 11 per cent to 11.3 pence per share due to an adverse mark to market remeasurements. The company’s capital investment was up by 28 per cent to £2.7 billion due to an increase in US capital spend. The company’s profit before taxation was recorded at £404 million in the first half of the fiscal year 2020. The company’s interim dividend was in line with the company’s policy and stood at 16.57 pence per share.

The company aims to achieve zero emissions by the year 2050. Furthermore, the company made regulatory progress in the United States and the United Kingdom; it signed a multi-year agreement for Massachusetts Electric and draft business plan of RIIO-2 submitted successfully. The company’s cost efficiency program is on track. The company acquired US Geronimo successfully. The company is also looking forward to constructing three interconnectors. The company received proceeds of £2 billion from the sale of the final Cadent stake.

The adjusted operating profit from the UK Electricity Transmission surged by 18 per cent to £625 million in H1 FY20 as against £531 million in H1 FY19. The adjusted operating profit from the UK Gas Transmission plunged year on year due to lower net revenues. The company’s net debt surged to £27.8 billion in the first half of the fiscal year 2020.

NG.-Share price performance

On 26th September 2019, while writing at 11:24 AM GMT, NG. shares were clocking a current market price of GBX 914 per share; which was more by 0.39 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £31.52 billion at the time of writing.

On 24^th October 2019, the shares of NG. touched a new peak of GBX 926.70 and reached the lowest price level of GBX 744.50 on 27th December 2018 in the last 52 weeks. The company’s shares were trading at 1.37 per cent lower from the 52-week high price mark and 22.76 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 1,504,913 at the time of writing before the market close. The company’s 5-day stock's daily average traded volume was 5,807,362.60; 30 days daily average traded volume- 5,689,953.77- and 90-days daily average traded volume – 6,184,258.20. The stock has lesser volatility in comparison to the benchmark index as the beta stood at 0.70, along with a dividend yield of 7.02 per cent.

The shares of the company have delivered a positive return of 6.73 per cent in the last quarter. The company’s stock surged by 19.13 per cent from the start of the year to till date. The company’s stock has given investors 11.12 per cent of a positive return in the last year.Â