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Total
shareholder return (TSR) is the measure of the returns
that a company has provided for its shareholders, reflecting
share price movements and assuming reinvestment of dividends.
It is, therefore, a good indicator of a company’s
overall performance.
Over
the last five years (as shown in the TSR chart below),
BT initially performed very strongly, but, like many
stocks in the telecoms, media and technology (TMT) sector,
suffered falls in its share price during the decline
of the past three years. BT’s TSR (as adjusted
for the rights issue and demerger) over the last five
years was negative 63% compared to a FTSE 100 TSR fall
of negative 32%. Substantially all of the five-year
negative FTSE performance has occurred over the past
year (negative 29%) whereas BT’s TSR in the last
12 months was negative 43%.
In
the period between the demerger on 19 November 2001
and 31 March 2003, BT’s share price was roughly
in line with the European telecommunications sector
after outperforming for most of the period. BT and the
European telecommunications sector have both under-performed
the FTSE 100 index by around 10% (as shown in the share
price performance chart), over the 16 month period.
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1
April 1998=100. Source: Datastream.
The graph shows our TSR performance (adjusted
for the rights issue and demerger of our mobile
business in the 2002 financial year) relative
to the FTSE 100.
Source:
Bloomberg
The graph shows relative price performance of
BT and European Telco Sector using the FTSE 100
as a base.
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