BT ups dividend as firm refocuses on the UK
BT has upped its dividend to shareholders as the telecoms giant reported a rise in profits.
The FTSE 100 company has declared a final dividend of 5.76p per share, bringing its full-year dividend to 8.16p, an increase of two per cent on the previous year. The firm’s policy is to at least maintain or increase its dividend every year.
The company posted pre-tax profits of £1.3bn in the year to end March, a jump of 12 per cent, which CEO Allison Kirkby attributed to “strong cost control and a step-up in focus and transformation” after delivering £900m in annualised cost savings.
Revenues for the year slipped two per cent to £20.4bn, which Kirkby put down to “lower international sales and handsets.”
The period saw BT refocus its operations on its home market after selling off assets in other parts of Europe. In April, the company agreed its Italian fibre networks and data centres to Retelit in an expected enterprise value of £136m-£157m). The firm has also sold its data centre business in Ireland for £49m, and has sold its Irish fibre business to Speed Fibre Group for £18m.
BT focuses on costs
Despite pocketing cash from the disposals, BT’s net debt continued to rise. It was up by £300m to just under £20bn by the end of the period, which the company put down to its increased pension scheme contributions.
The company continues to make further cost savings, adding it had completed 30 per cent of its goal to deliver a £3bn cost reduction programme by 2029. That included bringing labour costs down by three per cent and is likely to entail further job cuts in the coming years.
BT has forecast next year’s revenues and earnings to be largely flat compared to this year amid heightened competition. The telecoms firm is bracing to lose its crown as Britain’s biggest operator, following the bumper £15bn merger between Vodafone and Three, which is set to conclude later this year.
Kirby told reporters the firm hoped to compete with the new merged entity by marketing all of the company’s different brands: BT, EE and Plusnet.
“What has helped stabilise our customer base in the final quarter is the activation of all of our three consumer brands,” she said.
“We recognise we’ve got three uniquely well-placed brands. We activated all three of those brands during Q4 and that’s what we intend to do going forward.”
The company insisted it would see “sustained growth” from 2027.
BT shares fell 4.4% to 162p in early London trade.