This week, BT released its financial results for the full year to 31 March 2024
Reported revenue currently stands at £20.8 billion, up 1% from this time last year, as a result of price increases for broadband customers, fibre-enabled product sales in Openreach, and increased revenue in the consumer division.
But despite an increase in revenue, the company’s profits took a significant hit, with pre-tax profits falling 31% to £1.18 billion. Adjusted EBITDA stood at £8.1 billion, up 2%.
Capital expenditure (capex) was £4.9 billion, down by 3%, due to lower network spending despite Openreach’s accelerated fibre-to-the-premises (FTTP) rollout.
Openreach’s FTTP deployment rate reached one million premises in the past quarter, working out at an impressive 78,000 homes per week. The company has passed around 14.8 million FTTP broadband connections have been made on Openreach’s network, with a take up rate of around 34%.
In terms of cost savings, BT says it has hit its target to save £3 billion by 2025 a year early, with much of this total presumably being delivered by the company’s ongoing job cutting programme that will see 55,000 jobs eliminated by the end of the decade.
Now, new CEO Allison Kirkby says BT will aim to to do the same thing again, cutting a further £3 billion in costs, by 2029.
“This delivery and greater capex efficiency gives us the confidence to provide new guidance for significantly increased short term cash flow and sets out a path to more than double our normalised free cash flow over the next five years,” said Kirkby in a company press release.
“As we move into the next phase of BT Group’s transformation, we are sharpening our focus to be better for our customers and the country, by accelerating the modernisation of our operations, and by exploring options to optimise our global business. This will create a simpler BT Group, fully focused on connecting the UK, and well positioned to generate significant growth for all our stakeholders,” she continued.
Upon the news, share price was up 8% in early trading at 122p.
Kirkby also increased shareholder dividend by 3.9% to 8p per share.
The full overview of results can be found here.
The company has been under pressure to simultaneously continue its fast expansion of FTTP, whilst also cutting costs to make a dent in its £20 million debt pile. This week prior to the results release, it led investors to short BT for £300m in a twelve-year record as the company battles its consistently declining share price. Banks including BlackRock, Canada Pension Plan Investment Board and hedge funds such as AKO Capital and Kintbury Capital have shorted 2.79% of BT shares, making it the sixth most shorted company in the FTSE100 after major names such as Sainsbury’s and Rightmove. Kirkby said she was confident these investors are making the wrong decision, saying “I always love to squeeze the shorts . . . and prove them wrong.” BT announces plans to cut costs by further £3bn
