Philip Jansen, the chief executive of BT PLC () has spent just over £2mln on 1.25mln shares in the telecoms giant.
Jansen paid 163p a share, and unlike recent additions to Jansen’s BT shareholdings, these shares have not been awarded to him under the telecoms company’s (telco) share plan but have been purchased with hard cash.
The purchase follows last week’s announcement of plans to whittle away the company’s massive pension deficit by 2030 and to accelerate the rate at which it plans to roll out fibre to the premises (FTTP) broadband connections.
The FTTP news and the concomitant increase in capital expenditure (capex) put a dent in the company’s share price although at least three brokers welcomed the move.
Barclays said the share price markdown for BT on the increased capex unveiled by the telco to accelerate its fibre roll-out misses the long-term benefits.
This is “good/high ROCE [return on capital expenditure] capex”, Barclays argued and as such is a “positive value driver longer-term”.
JP Morgan, meanwhile, noted that the new more aggressive fibre capex plans dwarfed the offsetting super deduction tax benefits, driving major 25% a year cash flow downgrades across the next five years.
sang a similar tune, saying BT will suffer a bit of cash flow pain in the short-term but this will be worth it because of the longer-term value creation from FTTP deployment and the benefits of a smaller pension deficit.
Shares in BT were up 2.7% at 166.1p in mid-afternoon trading.