Broadband boosts BT but investors advised to ‘hold'

As BT reports positive Q3 results, Sheridan Admans, investment research manager at The Share Centre, explains what they mean to investors.

"Investors should be pleased with BT's Q3 results this morning which were boosted by a rise in demand for its high speed broadband and television service. The company saw a solid rise in new orders for its Global services operations and revenue is expected to improve in the second half of the year.

"The roll out of BT's new sports channel, to feature premiership football and rugby, and the recently added 60,000 subscribers for its video on demand service could start to see the company take market share from other subscription providers.

"Positively, the forward P/E is undemanding for a fairly defensive utility. BT currently offers investors an attractive yield and expects to grow dividends by 10% - 15% per annum over the next three years. However, revenue pressures and network expansion could limit cash flow generation looking ahead and for now we continue to recommend investors ‘hold' BT."

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