While the FTSE 100 endured a challenging second half of 2018, the BT Group plc (LON:BT.A) (BT.A.L) share price outperformed the wider index. Investors seemed to become increasingly positive about the future prospects for the business, with its refreshed strategy appearing to be delivered as expected in recent updates.
For instance, the FTSE 100 company recently reported that it has been able to make headcount reductions. It has also been able to focus to an increasing extent on wider cost cuts as it seeks to become increasingly efficient. While there is still some way to go in this regard, I feel that the company is nevertheless moving in the right direction.
Of course, the next month represents a period of significant change for BT. Its new CEO is set to take up his position in early February, and this could cause a degree of instability in my view. A revised strategy could be ahead, since from my experience new CEOs often wish to make their mark on a business. And if there is scope for an improvement in the company’s growth plan, then I think it would make sense to implement it – even though a major strategy overhaul was announced less than 12 months ago.
With BT having been unable to deliver improving EPS growth in spite of a number of changes to its strategy in recent years, I feel that its future remains uncertain. Although I believe it could deliver further capital growth over the long run, I feel that there could be a period of uncertainty ahead after what was a much-improved second half of 2018. This could manifest itself in a volatile share price that may mean it is unable to deliver the level of performance versus the FTSE 100 which was experienced in the second half of 2018.