BT welcomes new CEO Kirkby with a 3% rise in sales

• This is the first day of Allison Kirkby’s tenure as BT Group’s CEO
• It coincides with the UK telco’s latest earnings announcement
• The Scot gets a positive welcome with sales and margin improvements (just)
• But it’s not all good news – she’ll be concerned about the performance of the telco’s enterprise services division

Allison Kirkby will be relieved: The fact that her first day as the new CEO at BT Group coincided with the UK national telco’s latest financial update might have made for a bumpy landing at the operator’s London headquarters. But, fortunately, the financial conditions for her arrival were generally favourable, as BT reported a 3% increase in revenues for its fiscal third quarter and a slight improvement in its profit margin. 

BT’s adjusted revenues (before one-time items) for the three months that ended 31 December 2023 were £5.34bn, up by the aforementioned 3% year on year, while the adjusted EBITDA came in at £2.03bn, up just 1%. 

For the first nine months of the financial year that ends in March 2024, BT reported adjusted revenues of £15.76bn, an increase of 3% year on year, and adjusted EBITDA of £6.12bn,  also up by 3%. Profit before tax for the first three fiscal quarters combined came in at almost £1.5bn, an increase of 15% on the same period a year earlier. 

“BT Group has delivered another quarter of revenue and EBITDA growth, while rapidly building and upgrading customers to our full-fibre broadband and 5G networks, and we continue to be on track to achieve our financial outlook for the year,” stated Kirkby in her first crafted statement as BT’s head honcho. “We are providing great digital connectivity and services, while laying the foundations for future growth that will benefit our customers, investors and the UK. As I assume the role of chief executive, we remain committed to our purpose and our strategic focus, and I am looking forward to leading BT Group into its next phase of development,” she added. 

BT is particularly happy with the progress being made by its quasi-autonomous wholesale fixed access network division, Openreach, which is building the telco’s fibre-to-the-premises (FTTP) network that now reaches 13 million UK premises with construction to a further 6 million already underway, according to the operator. Further details of Openreach’s FTTP progress can be found in the trading update. 

Investors were largely unmoved, though, as was BT’s share price following the release of the trading update, as there were no real surprises in the few details provided: BT’s share price edged up by less than 1% to 113.15 pence on the London Stock Exchange.  

So for Kirkby, who has joined after nearly four years at the helm of Nordic telecom powerhouse Telia, the first day in the BT hot seat could have been a lot worse – all the headline numbers are heading in the right direction (at least for now). 

But she will be concerned by the performance of BT Business, the division responsible for delivering services to enterprise users which, according to the collective wisdom of the telecom industry, offers the greatest opportunities for sales and profit growth once 5G and fibre network rollouts, plus cloud-native service enablement platform deployments, are in place.    

If BT is to reap the potential benefits of the private wireless, network APIs and generative AI services era, its business division needs a reversal of fortunes. For the nine months to the end of December, BT Business reported revenues of £6.13bn, almost in line with the same period a year earlier, while its adjusted EBITDA dropped by 13% to just over £1.2bn. 

By contrast, BT’s other reported divisions – Consumer and Openreach – reported increases in sales and earnings.    

BT noted in its trading update that the Business division “continues to be impacted by higher input costs, legacy declines and prior year one-offs, partly offset by cost transformation and growth in Small & Medium Business (SMB) and Security.” Legacy declines refers to voice and other traditional fixed line services that are no longer fit for purpose for modern enterprise users. 

It’s hard to imagine Kirkby won’t have had her eye on the performance and potential of BT Business for quite some time – she has, after all, been a BT board director since March 2019. A turnaround will be required soon and, if her tenure at Telia is anything to go by, Kirkby is just the person to set it in motion – see As she heads to BT, Allison Kirkby leaves Telia in decent shape.

- Ray Le Maistre, Editorial Director, TelecomTV