BT RAMPS UP COST-CUTTING SPREE AND UPDATES DIVIDEND POLICY AS TURNAROUND PLAN CONTINUES

BT plans to cut its costs by a further £700million over the next four years amid dwindling revenue and flat profits. 

The telecoms giant said it was extending its restructuring programme by a year, taking it to the end of 2030. It will also increase its cost-cutting target to £3.7billion, from £3billion previously. 

The business has previously announced plans to cut up to 55,000 jobs globally by 2030. 

In its annual results on Thursday, BT said the restructuring plan it launched in May 2024 would now cost it £1.4billion in total, up from £1billion.  

BT has already delivered annual savings of £1.5billion as part of its radical overhaul, including £580million in the year to 31 March. 

In the past year, the group's workforce shrank by 7 per cent to 108,000.

Its broadband arm Openreach lost 203,000 customer broadband lines in the fourth quarter as customers switched to rival 'altnet' providers. This gave a full-year total of 825,000, which was slightly better than guidance. 

BT reported flat underlying earnings of £8.23billion in the year to 31 March, as underlying revenues fell 4 per cent to £19.65billion, with UK service revenues down 1 per cent despite price rises.

On a statutory basis, the group's pre-tax profits rose 8 per cent to £1.44billion.

BT said its revenues were also set to decline further over the year ahead, to between £19billion to £19.5billion, while earnings are expected to edge higher to between £8.2billion to £8.3billion.

UK service revenues are also expected to come under further pressure, with BT forecasting a range of £15.1billion to £15.4billion for 2026-27, against £15.4billion reported in the past year.

Openreach has been hit by customer losses in recent years as low-priced competitors, such as CityFibre, have entered the fray. 

But BT said its consumer arm returned to customer growth across broadband, mobile and TV during the year.

In a bid to cut costs, BT recently sold its Italian arm and has agreed to sell its Irish wholesale and enterprise business unit. 

On Thursday, BT declared a final dividend of 5.87p per share, increasing the full year dividend to 8.32p per share, a year-on-year increase of 2 per cent.  

BT said its new dividend policy aimed to 'grow the dividend by low to mid single digit percent per annum in FY27 and onwards' until its debt achieved a BBB+ credit rating, which it said would free up cash 'available for enhanced distributions to shareholders.'

The group's previous policy was to 'maintain or grow the dividend each year'.

Allison Kirkby, BT’s chief executive, said the business was 'transforming ahead of plan, offsetting headwinds while successfully competing'. 

The group guided towards revenue of between £19billion and £19.5billion this year and adjusted earnings of between £8.2billion and £8.3billion. 

Dan Coatsworth, head of markets at AJ Bell, said: 'BT’s recovery is built on moving past the peak period of capital expenditure on infrastructure which should then allow free cash flow generation to advance substantially.

'It has made progress on reducing costs in the past financial year and is intent on rewarding shareholders for their patience while the turnaround plan plays out. However, the company is finding it difficult to dial up revenue growth.'

He added: 'Broadband customers are still being lost in its Openreach business and while its consumer retail division returned to growth, average revenue per user remained under some pressure thanks to strong competition in this market.'

2026-05-21T09:29:14Z