(Alliance News) – BT Group PLC on Thursday said revenue was held back by lower international sales in competitive markets although cost control meant earnings nudged higher.
In response, shares in the London-based telecommunications firm were down 2.6% at 164.88 pence each in London on Thursday. The wider FTSE 100 is down 0.6%.
BT said pretax profit rose 12% GBP1.33 billion in the year to March 31 from GBP1.19 billion a year prior.
Profit was aided by the non-repeat of a GBP488 million impairment of goodwill incurred in the prior year.
Revenue weakened 2.1% to GBP20.36 billion from GBP20.80 billion, a touch below company-compiled consensus of GBP20.39 billion.
The decline was mainly due to continued challenging trading conditions in Global and non-UK portfolio channels and weaker handset trading in Consumer, offsetting the benefit of first-to-the-post growth in Openreach and price increases, BT said.
Adjusted earnings before interest, taxes, depreciation and amortisation edged up 1.3% to GBP8.21 billion from GBP8.10 billion, just shy of GBP8.23 billion consensus.
Normalised free cash flow shot up 25% to GBP1.60 billion from GBP1.28 billion. Capital expenditure was GBP4.86 billion down slightly from GBP4.88 billion a year ago.
“Although revenue declined year-on-year driven mainly by lower international sales and handsets, strong cost control and a step-up in focus and transformation resulted in growth in both Ebitda and normalised free cash flow, allowing us to increase our dividend,” Chief Executive Allison Kirkby said.
BT raised its final dividend by 1.2% to 5.76 pence per share from 5.69p. Its total dividend was 2.0% higher at 8.16p per share from 8.00p.
BT said Openreach broadband lines fell 243,000 in the fourth quarter, driven by losses to competitors and a weaker broadband market. It expects the run rate in the second half of financial 2025 to continue through the current financial year.
Analysts at Citi said this implies financial 2026 Openreach broadband losses of around 900,000 versus Visible Alpha consensus of 729,000.
More encouragingly, BT reported record demand for Openreach first-to-the-post with quarterly net adds above 500,000 for the first time.
CEO Kirkby said the momentum in its full fibre programme is such that “we are now raising our build target by 20% to up to 5 million UK premises in [financial 2026], keeping us comfortably on track to reach 25 million by the end of 2026, while maintaining our cash flow guidance.”
She noted BT is now only one year away from “our inflection to GBP2 billion of normalised free cash flow, our target for FY27, and remain on track to deliver GBP3 billion by the end of the decade.”
BT said it was on track to deliver on its five-year GBP3 billion cost reduction programme to financial 2029, with 30% of the target achieved in financial 2025.
For financial 2026, BT expects adjusted group revenue of GBP20 billion, adjusted UK service revenue of GBP15.3 billion to GBP15.6 billion, and an adjusted Ebitda between GBP8.2 billion and GBP8.3 billion.
Capital expenditure, excluding spectrum, is expected to be around GBP5.0 billion reflecting the accelerated FTTP build, with normalised free cash flow around GBP1.5 billion.
From 2027 to 2030, BT expects sustained adjusted group revenue and adjusted UK service revenue growth, and Ebitda growth ahead of revenue enhanced by cost transformation.
Capital expenditure will reduce by more than GBP1 billion from the financial 2026 level, it said.
By Jeremy Cutler, Alliance News reporter
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