BT Group PLC (LSE:BT.A) confirmed its outlook for the current and full year 2023 after it reported a 3% fall in revenue and a 1% rise in underlying profits for the first six months.
The company also said it expects an increase in cash flow in the long term when it has built most of its full fibre broadband network.
Revenue dropped £10.3bn in the six months to September 30 from £10.59bn in the same period last year, BT said in a statement.
The fall in revenue came on the back of declines in the company’s Enterprise and Global units and flat sales in its Consumer business and was partially offset by growth at its Openreach broadband network.
Underlying profits (adjusted EBITDA) rose to £3.74bn from £3.72bn as the impact of the revenue decline was offset by lower costs.
Pre-tax profits fell 5% to £1bn due to higher finance expenses partly offset by increased EBITDA.
The group reiterated its previous guidance for EBITDA of £7.5bn-£7.7bn for the current year and above £7.9bn for full-year 2023. Revenue for the current full year is expected to be broadly flat.
Earlier this week, BT confirmed it delivered on its £1bn of gross annualised cost savings 18 months ahead of the March 2023 target. This means the group can bring forward its FY25 target of £2bn in savings to FY24, with further savings in FY25, within the expected cost of £1.3bn, it said in today’s earnings release.
OpenReach has so far rolled out full fibre broadband to 6mln customers and the network is expected to span 25mln premises by 2026.
By the end of the decade, when Openreach has passed the peak of its full fibre broadband roll-out, capital expenditure is expected to fall by £1bn and operating costs by £500mln, generating an increase in normalised free cash flow of at least £1.5bn compared with the current year, BT said.
The group said it has over 5.2mln 5G ready customers and its 5G network now covers over 40% of the UK population.
The company has reinstated its dividend and is making an interim payout of 2.31p per share.
BT chief executive Philip Jansen said: "These results demonstrate an acceleration of pace in the transformation of BT. We are creating a better BT for our customers, the country and our shareholders. We're going further and faster on the UK's next generation connectivity; we're modernising BT and bringing down costs; and we're reinstating the dividend today, as planned.”
BT has been the target of bid speculation after it recently appointed advisory firm Robey Warshaw to head off any potential takeover attempt from French billionaire and shareholder Patrick Drahi.
Altice, Drahi’s vehicle, took a 12% stake in June and at that time was ostensibly friendly, but its six-month bid preclusion period ends in early December.
Shares rose 3.2% 146.70p in opening trade.