BT profits fell by nearly a third last year despite rising sales revenue on the back of broadband price hikes and a multi-year cost-cutting plan across the business.
The telecoms giant said pre-tax profits fell 31% to £1.18 billion last year while revenue rose 1% to £20.8 billion. The profit drop was in part down to a £488 million accounting charge based on falling profits in recent years.
It said recent price increases for broadband customers, which have attracted criticism over the last year, had helped bolster revenues.
BT has come under pressure amid plans to aggressively roll out its full-fibre broadband network across the UK while also cutting tens of thousands of jobs and slashing costs across the firm.
The company has already cut £3 billion worth of costs in recent years, it said, and is kicking off a further savings plan of £3 billion between now and 2029, which will include another £600 million from the current process.
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
The plan has already involved cutting 10,000 jobs, bringing BT’s headcount to 120,000 people.
The company is aiming to slim down to between 75,000 and 90,000 workers by 2030, as previously announced, and said that job cut plans would not change with the further £3 billion in planned savings.
Instead, the savings will come from an increased focus on the UK market, and efforts to digitise, simplify and “reskill” its workforce and business operations.
Chief executive Allison Kirkby did not rule out selling off some of BT’s international business arms, saying the company is “exploring a number of options for all of our international footprint”.
BT shares rose 9% in early trading.
It comes after investors placed a record £300 million in stock market bets against the group.
Canada Pension Plan Investment Board and BlackRock Investment Management, along with hedge funds including AKO Capital and Kintbury Capital, have all shorted the FTSE 100 company’s stock, according to public disclosures.
Investors short stocks when they believe a company’s share price is likely to fall, borrowing the stock and selling the shares, with the intention of buying them back at a lower price to make profit. The hedge funds’ short positions mean they think BT’s share price will fall.
Ms Kirkby said the firm had hit a turning point in the broadband rollout, having now built fibre broadband in 14 million homes, and started building on a further six million, as part of a plan to reach 25 million homes by late 2026.
She said the business had passed the point of peak spending on the infrastructure expansion, which it carries out via its subsidiary Openreach.
Ms Kirkby said BT will hike its dividend to shareholders by 3.9% to 8p per share.
She said: “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.”