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
09 November, 2006
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. Interim Results - Highlights announcement made on
09 November, 2006
BT Group Half Year Results and Interim Report
Chairman's Statement
These strong half year results show sustained momentum across the business with
revenues up 3 per cent and earnings per share before specific items up 19 per
cent.
I am pleased to report that we will be paying an interim dividend of 5.1 pence,
up 19 per cent on last year, showing our continued commitment to improving
shareholder returns and our confidence for the future.
Sir Christopher Bland, 8 November 2006
Review
These results show another strong team performance with every part of the
business playing its part. Revenue increased 3 per cent with continued strong
growth in new wave revenue, up 20 per cent, driven by our networked IT services,
broadband and mobility businesses. Total networked IT services contract wins
amounted to GBP4.0 billion over the last twelve months. BT had 9.3 million
wholesale broadband connections at 30 September 2006, including 838,000 local
loop unbundled lines, an increase of 2.8 million connections year on year. The
strong growth in new wave revenue more than offset the 4 per cent decline in
traditional revenue.
Group profit before taxation, specific items and leaver costs increased by 17
per cent driven by operational efficiencies and a reduction in net finance
costs, partly offset by the costs of supporting the growth in new wave
activities. Reported profit before taxation, including specific items and leaver
costs, was 26 per cent higher than last year. Specific items for the half year
were GBP3 million (see note 2) and principally comprise costs of GBP23 million
relating to the further rationalisation of the group's office portfolio, partly
offset by a profit of GBP20 million arising from the group's partial disposal of
its interest in an associated undertaking.
Earnings per share before specific items and leaver costs were 11.8 pence, an
increase of 20 per cent. Reported earnings per share, including specific items
and leaver costs, were 28 per cent higher at 11.3 pence.
Net debt was GBP8,079 million, GBP54 million below last year. Free cash flow
generated in the first half amounted to GBP321 million.
An interim dividend of 5.1 pence per share will be paid on 12 February 2007 to
shareholders on the register on 29 December 2006.
Our performance underpins our confidence that we will continue to grow revenue,
EBITDA, earnings per share and dividends this financial year. Revenue growth
will continue to be fuelled by new wave services; EBITDA improvement will be
driven by the continued growth in BT Retail's profitability and an acceleration
through the year of the EBITDA growth in BT Global Services. We are confident in
our ability to improve shareholder returns and accelerate the strategic
transformation of the business.
This advertisement is a summary of the interim results of BT Group plc ("the
group") for the six months ended 30 September 2006. The full interim results
statement, including the group's results for the three months ended 30 September
2006, is available on the internet at www.btplc.com/Sharesandperformance. If you
have any queries as a shareholder please call Freefone 0808 100 4141.
BT Group plc 81 Newgate Street, London EC1A 7AJ
Independent Review Report to BT Group plc
Introduction
We have been instructed by the group to review the financial information for the
six months ended 30 September 2006, which comprises the summarised group income
statement, group statement of recognised income and expense, group cash flow
statement and group balance sheet at 30 September 2006. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
This interim report has been prepared in accordance with the basis set out in
note 1.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies have been
consistently applied. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit and therefore provides a lower level
of assurance. Accordingly we do not express an audit opinion on the financial
information. This report, including the conclusion, has been prepared for and
only for the group for the purpose of the Listing Rules of the Financial
Services Authority and for no other purpose. We do not, in producing this
report, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2006.
PricewaterhouseCoopers LLP, Chartered Accountants
1 Embankment Place, London WC2N 6RH
8 November 2006
Summarised statements
Group income statement for the six months ended 30 September
(unaudited) 2006 2005
GBPm GBPm
Revenue 9,805 9,498
_______ _______
Operating profit 1,318 1,222
Finance costs (1,293) (1,392)
Finance income 1,192 1,150
Share of profits of associates and joint ventures 7 8
Profit on disposal of associate 20 -
_______ _______
Profit before taxation 1,244 988
Taxation (305) (243)
_______ _______
Profit for the period 939 745
======= =======
Earnings per share
- basic 11.3p 8.8p
- diluted 11.1p 8.7p
Earnings per share before specific items (note 2)
- basic 11.3p 9.5p
- diluted 11.1p 9.3p
Interim dividend proposed per share 5.1p 4.3p
Prior year final dividend paid per share 7.6p 6.5p
Group statement of recognised income and expense for the six months
ended 30 September
(unaudited) 2006 2005
GBPm GBPm
Profit for the period 939 745
_______ _______
Actuarial (losses) gains on defined benefit pension schemes (369) 1,090
Net gains on revaluation of available-for-sale investments - 1
Net gains (losses) on cash flow hedges 61 (5)
Exchange differences on translation of foreign operations (72) (4)
Tax on items taken directly to equity 82 (327)
_______ _______
Net (losses) gains recognised directly in equity 298 755
_______ _______
Total recognised income and expense for the period 641 1,500
_______ _______
Group cash flow statement for the six months ended 30 September
(unaudited) 2006 2005
GBPm GBPm
Net cash inflow from operating activities 2,193 2,104
Net cash used in investing activities (2,059) (767)
Net cash used in financing activities (997) (1,138)
Effects of exchange rate changes - 23
_______ _______
Net (decrease) increase in cash and cash equivalents (863) 222
Cash and cash equivalents at beginning of period 1,784 1,310
_______ _______
Cash and cash equivalents at end of period 921 1,532
======= =======
Free cash flow 321 377
_______ =======
Group balance sheet
(unaudited) 30 September 30 September 31 March
2006 2005 2006
GBPm GBPm GBPm
Non current assets 18,164 17,977 17,978
Current assets 6,586 9,130 6,722
_______ _______ _______
Total assets 24,750 27,107 24,700
Current liabilities 10,053 11,596 9,480
_______ _______ _______
Total assets less current liabilities 14,697 15,511 15,220
======= ======= =======
Non current liabilities 13,156 14,755 13,613
Equity shareholders' funds 1,494 707 1,555
Minority interest 47 49 52
_______ _______ _______
Total equity 1,541 756 1,607
_______ _______ _______
14,697 15,511 15,220
======= ======= =======
Notes
1 The financial information set out in these interim financial results has
been prepared in accordance with the Listing Rules of the Financial
Services Authority. The accounting policies which have been applied to
prepare these interim financial results are the same as those used for
preparation of the audited consolidated financial statements for the year
ended 31 March 2006.
2 The results as shown in the summarised income statement are reported
inclusive of specific items. Specific items comprise significant one off
or unusual items, which are separately identified and disclosed. This is
consistent with the way that financial performance is measured by
management and provides a meaningful analysis of the trading results of
the group. Specific items recognised for the six months ended 30 September
2006 were a net charge before taxation of GBP3 million (2005: GBP82
million). Costs of GBP23 million relating to the further rationalisation
of the group's office portfolio were incurred (2005: GBP12 million). This
was partly offset by a profit of GBP20 million arising from the group's
disposal of 6 per cent of its equity interest in Tech Mahindra Limited,
an associated undertaking, reducing the group's holding to 36 per cent.
In the prior year, a provision of GBP70 million was recognised relating to
the incremental and directly attributable costs in connection with
creating the Openreach line of business.
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.
Date 09 November, 2006