BT has this morning announced that Gavin Patterson, CEO of almost five years, is to leave his role, with the market reaction to recent results cited as the reason for change.
The Board expects to have a successor in place during the second half of the year and until such time Gavin will continue to serve as Chief Executive.
Jan du Plessis, Chairman of BT said: “Gavin has been with BT for just over 14 years and I want to thank him for his contribution to our business during that time, in particular during the almost five years that he has served as Chief Executive.”
“The Board is fully supportive of the strategy recently set out by Gavin and his team. The broader reaction to our recent results announcement has though demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy.”
“To that end a number of concrete initiatives have already been launched and Gavin’s commitment to continue to lead the business during this transition phase will provide invaluable continuity. While BT is a very demanding business, with multiple stakeholders, we do have significant opportunities ahead of us. I am confident that, for the remainder of his term, Gavin and his senior management team will continue to display the energy required to deal with every dimension of the task at hand.”
George Salmon, Equity Analyst at Hargreaves Lansdown, said:“Perhaps fittingly, Gavin Patterson’s tenure was very much a game of two halves.
“The rise of BT’s Sport coverage, which has stepped up to challenge the dominance of Sky initially brought some good times for investors. However, it’s been a different story over the last two years.
“Since 2016, BT’s share price graph resembles something of a black run; pretty much always on a downward trend and with a few nasty cliffs here and there. Ultimately, this is what’s behind the change. Shareholder confidence has followed the share price down, and with BT embarking on a crucial restructure, the board has decided it’s time for a change.
“To be fair, it’s not all been Patterson’s fault. But leadership have to shoulder some responsibility for the poor performance, not least the Italian accounting scandal and Openreach’s misdemeanours. Both have cost the group hundreds of millions. These fines and write-downs, together with a deteriorating performance from BT’s business-to-business divisions, have led to promises on the dividend being broken.
“The new chief executive is expected to start later this year, and with the shares at a six-year low, steadying the ship will be their first task.”