BT has announced an increase in its dividend payout to shareholders following a reported rise in profits.
The telecom heavyweight declared a final dividend of 5.76p per share, taking the total annual dividend to 8.16p – a two per cent hike on last year’s figures. The firm maintains a policy of maintaining or growing the dividend yearly, as reported by City AM.
Pre-tax profits surged to £1.3bn for the 12 months ending March, marking a 12 per cent increase, which CEO Allison Kirkby attributed to “strong cost control and a step-up in focus and transformation” after realising £900m in annualised cost savings.
However, BT’s revenues fell by two per cent to £20.4bn over the year. Kirkby ascribed this dip to “lower international sales and handsets.”
During this fiscal period, BT sharpened its focus on domestic operations, divesting certain European assets. April saw the sale of its Italian fibre networks and data centres to Retelit, with the anticipated enterprise value lying between £136m-£157m.
Additionally, they disposed of their Irish data centre business for £49m and passed on their Irish fibre operations to Speed Fibre Group at a cost of £18m.
BT focuses on costs
Yet even with the proceeds from these sales, BT’s net debt rose by £300m to just shy of £20bn by period-end, largely due to escalated pension scheme contributions.
The company has stated that it is continuing to make further cost savings, having achieved 30 per cent of its target to deliver a £3bn cost reduction programme by 2029. This includes reducing labour costs by three per cent and is likely to result in additional job cuts in the future.
BT has predicted that next year’s revenues and earnings will be largely similar to this year due to increased competition. The telecoms firm is preparing for the possibility of losing its position as Britain’s largest operator, following the significant £15bn merger between Vodafone and Three, which is expected to be finalised later this year.
Kirby informed reporters that the company plans to compete with the newly merged entity by promoting all of the company’s different brands: BT, EE and Plusnet.
She said: “What has helped stabilise our customer base in the final quarter is the activation of all of our three consumer brands.”
“We recognise we’ve got three uniquely well-placed brands. We activated all three of those brands during Q4 and that’s what we intend to do going forward.”
The company maintained that it would experience “sustained growth” from 2027 onwards.
BT shares dropped 4.4% to 162p in early London trading.
