The Lemon Fool

Allison Kirkby, Chief Executive, commenting on the results, said

"BT Group built and connected customers to our next generation networks at record speed and efficiency over the past year, while continuing to grow revenue and EBITDA. Having passed peak capex on our full fibre broadband rollout and achieved our £3 billion cost and service transformation programme a year ahead of schedule, we've now reached the inflection point on our long-term strategy.

"This delivery and greater capex efficiency gives us the confidence to provide new guidance for significantly increased short term cash flow and sets out a path to more than double our normalised free cash flow over the next five years. This enhanced cash flow allows us to increase our dividend for FY24 by 3.9% to 8.0 pence per share. We're also setting a further £3bn of gross annualised cost savings to be reached by the end of FY29.

"As we move into the next phase of BT Group's transformation, we are sharpening our focus to be better for our customers and the country, by accelerating the modernisation of our operations, and by exploring options to optimise our global business. This will create a simpler BT Group, fully focused on connecting the UK, and well positioned to generate significant growth for all our stakeholders."

• We have recognised a non-cash impairment of goodwill allocated to Business of £488m as a specific item, reflecting a decline in profitability in recent years

• Reported profit before tax £1.2bn, down 31% primarily due to impairment of goodwill, increased depreciation, amortisation and pension interest expense, partially offset by adjusted2 EBITDA growth

• Capital expenditure ('capex') £4.9bn, down 3% primarily driven by lower networks spend despite higher FTTP build in the year due to reduced unit costs and efficiencies; cash capex of £5.0bn also down 6%

• Net cash inflow from operating activities £6.0bn; normalised free cash flow1 £1.3bn, down 4% due to working capital timing and a prior year tax refund, partly offset by EBITDA growth and lower capital expenditure

• Net debt £19.5bn (FY23: £18.9bn), increased mainly due to our scheduled pension scheme contributions of £0.8bn

• Gross IAS 19 pension deficit of £4.8bn, up from £3.1bn at 31 March 2023 mainly due to the increase in real interest rates and narrowing of credit spreads over the period, partly offset by our scheduled contributions

• Final dividend of 5.69 pence per share (pps), bringing the full year dividend to 8.00pps, up 3.9%

• FY25 Outlook: Adjusted1 revenue growth of 0-1% and EBITDA of around £8.2bn; capital expenditure excluding spectrum less than £4.8bn; normalised free cash flow of around £1.5bn

• Mid-term guidance: Consistent and predictable adjusted1 revenue growth and EBITDA growth ahead of revenue, enhanced by cost transformation from FY26 to FY30; capital expenditure excluding spectrum less than £4.8bn until FY26, reducing by c. £1bn post peak FTTP build; normalised free cash flow of c. £2.0bn in FY27 and c. £3.0bn by the end of the decade

   Event    |   Date   
Announce    | 16-May-24
Ex-Dividend | 08-Aug-24
Payment     | 11-Sep-24