AXA Framlington Blue Chip Equity Income manager Jamie Forbes-Wilson views the regulator’s latest move as an indication that there will be a further delay in settling the longstanding dispute between BT and Ofcom, which has been “the dark cloud hanging over the company and share price for some time now.”
“It is interesting to see how the share price has in recent months fallen substantially as a result of the derating of the share rather than any significant adjustment to the company’s earnings,” said Forbes-Wilson.
“There is clearly a difficult relationship between BT and the regulator, and the statement makes it appear that we are moving closer to this becoming a protracted legal case which cannot possibly be helpful in the development of the UK’s telecom infrastructure,” he continued.
“It is not helpful for the UK and not helpful for BT’s share price. The fact that BT’s share price did not fall further this morning reflects that a lot has been discounted already. Meanwhile, BT’s cash flow is still healthy, the dividend is still growing and the benefits of the EE acquisition are coming through. The company is in good shape, it is just very unfortunate that this dark cloud remains.”
