By the look of things, BT's venture into football is paying off.During the last three months it gained 156,000 new broadband customers, or a 90% market share of new connections.
While lots of people have been focusing on football, BT quietly upped the ante last week by vastly improving its TV offer and cutting prices at the same time. In addition to Sky Movies, it also started offering the most popular children's channels over its internet TV service.
By signing up to its superfast broadband, customers who aren't too bothered about football can then gain access to most of the popular pay TV channels for just £10 a month and make some big savings compared with Sky.
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But it has certainly broadened the appeal of its TV product, which could lead to more profitable broadband contracts in the months ahead. All in all, the company looks like a solid investment.
It has some very attractive assets, such as the Alton Towers and Legoland theme parks, plus Madame Tussauds and the London Eye, but there are lots of red flags for investors here.
Most notably, it is being sold by private-equity owners who are looking to cash out. The company is also loaded up with debt. Once the interest bills have been paid and the theme parks have been maintained, there will not be much money left over for shareholders.
Even in the middle of the 280p-330p flotation price range, the company will be valued at a racy 12 times its historic gross cash flow (EBITDA). Investors will already be paying upfront for many years profit growth ahead.
Verdict: this isn't the Royal Mail avoid
Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.
After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.
In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for Moneyweek in 2010.
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