- BT’s pre-tax profits soared by 29% in the six months ending 30 September
- It also revealed turnover grew by 3% to £10.4bn on the back of higher prices
- A year ago, BT announced it was targeting £500m in extra cost savings by 2025
BT Group upheld its annual financial guidance after significant cost reduction efforts drove earnings marginally higher in the first half.
The telecoms giant expects to report rising adjusted revenue and earnings before nasties on a pro-forma basis, as well as normalised free cash flow towards the high end of its £1billion to £1.2billion range.
For the six months ending 30 September, turnover grew by 3 per cent to £10.4billion on the back of price hikes and fibre-enabled product sales.
Bigger goal: A year ago, BT announced it was targeting £500million in extra cost savings by 2025 in response to worsening inflation, particularly from energy prices
Reported pre-tax profits soared by 29 per cent to £1.1billion as cost savings helped compensate for inflationary pressures and one-off items in the prior year.
A year ago, BT announced it was targeting £500million in extra cost savings by 2025 in response to higher inflation.
It told shareholders on Thursday the cost-cutting strategy was on track, having made gross annualised savings of £2.5billion since April 2020.
The London-based business, which owns the internet service provider EE, is also pursuing the cost reduction plans to ensure it has enough cash flow to finance its network investments.
It delivered ultrafast full-fibre broadband to a record 860,000 premises during the recent quarter, meaning its FTTP network now covers 12 million buildings across the UK.
Outgoing chief executive Philip Jansen said BT is ‘rapidly building and connecting customers to our next generation networks, we’re simplifying our products and services, and we’re now seeing predictable and consistent revenue and EBITDA growth’.
Jansen is set to be replaced sometime early next year by Allison Kirkby, the head of Swedish telecoms operator Telia Company and a non-executive director at BT since 2019.
As BT boss, Kirkby will be tasked with achieving the group’s £3billion cost savings target while expanding its 5G and full-fibre network.
By the end of 2026, BT’s Openreach arm intends to invest £15billion installing full-fibre broadband across 25 million UK homes and businesses, with about a third of those premises in hard-to-reach rural localities.
It is also planning up to 55,000 staff cuts by 2030, equivalent to over 40 per cent of its global workforce, with about a fifth replaced by artificial intelligence.
Russ Mould, investment director at AJ Bell, said: ‘Incoming CEO Alison Kirkby will take a look at today’s first half results from BT and find elements to both please and upset her.
‘The company has made significant progress on costs and is reining in spending, which should result in healthier cash generation.
‘This is clearly encouraging but is also the kind of stuff Kirkby herself might have targeted, as typically a new boss will look for some easy wins by making efficiencies to get their tenure off to a good start.’
BT Group shares were 6.3 per cent up at 118.05p on Thursday morning, making them the second-highest riser on the FTSE 100 Index, although they have still fallen by around 7.5 per cent over the past 12 months.
