- BT’s pre-tax profits rose 29% in the six months ended September 30
- It also revealed that sales grew 3% to £10.4 billion, thanks to higher prices
- A year ago, BT announced it wanted to achieve £500 million in additional cost savings by 2025
BT Group maintained its annual financial guidance after significant cost cuts pushed profits marginally higher in the first half of the year.
The telecoms giant expects to report rising adjusted revenues and profits on a pro-forma basis, as well as normalized free cash flow towards the high end of the £1 billion to £1.2 billion range.
For the six months ended September 30, sales grew 3 percent to £10.4 billion, driven by price increases and sales of fiber optic products.
Bigger target: A year ago, BT announced it wanted to deliver £500 million in additional cost savings by 2025 in response to worsening inflation, mainly driven by energy prices
Reported pre-tax profits rose 29 percent to £1.1 billion as cost cuts helped offset inflationary pressures and one-offs from the previous year.
A year ago, BT announced it wanted to make £500m of additional cost savings by 2025 in response to higher inflation.
It told shareholders on Thursday that its cost-cutting strategy is on track, having delivered gross annualized savings of £2.5 billion since April 2020.
The London-based company, which owns internet provider EE, is also pursuing cost-cutting plans to ensure it has sufficient cash flow to fund its network investments.
The company delivered ultra-fast full-fiber broadband to a record 860,000 premises last quarter, meaning its FTTP network now covers 12 million premises in the UK.
Outgoing CEO Philip Jansen said BT is ‘rapidly building and connecting customers to our next generation networks, we are simplifying our products and services and we are now seeing predictable and consistent revenue and EBITDA growth’.
Jansen will be replaced sometime early next year by Allison Kirkby, the head of Swedish telecoms operator Telia Company and non-executive director at BT since 2019.
As BT boss, Kirkby will be tasked with delivering the group’s £3 billion cost savings target while expanding its 5G and full fiber network.
By the end of 2026, BT’s Openreach division plans to invest £15 billion to install full fiber broadband in 25 million UK homes and businesses, with around a third of these buildings located in hard-to-reach rural areas.
The country is also planning a workforce reduction of 55,000 by 2030, representing more than 40 percent of the global workforce, of which about a fifth will be replaced by artificial intelligence.
Russ Mould, investment director at AJ Bell, said: ‘Incoming CEO Alison Kirkby will look at today’s first half results for BT and find elements that both please and upset her.
“The company has made significant progress on costs and is reining in expenses, which should result in healthier cash generation.
‘This is clearly encouraging, but it is also something Kirkby himself may have been referring to, as a new boss typically looks for easy wins by making efficiencies to start his tenure on the right foot.’
BT Group shares were up 6.3 per cent on Thursday morning at 118.05p, making them the second highest gainer on the FTSE 100 Index, although they are still down around 7.5 per cent over the past 12 months.