BT reports lower profit but backs guidance and hails "solid start"

BT Group PLC on Thursday said it has made a "solid start"to its new financial year but still reported lower profit for the first quarter.

In a trading update, the London-based telecommunications company said pretax profit from continuing operations fell 4.0% to £505 million in the first quarter to the end of June from £526 million a year earlier. BT said higher finance costs were offset by lower restructuring costs.

Adjusted earnings before interest, tax, depreciation and amortisation for the quarter was £2.01 billion, down 0.8% from £2.03 billion. It said lower broadband and voice margins offset "strong cost transformation".

Adjusted revenue from continuing operations slipped 0.1% to £4.32 billion from £4.34 billion.

"BT has made a solid start to the year. We are connecting more customers to our next-generation networks, and are increasingly the choice for mission-critical solutions, as we connect and protect the country and accelerate our transformation," said Chief Executive Allison Kirkby.

BT said its fibre-to-the-premises footprint increased to 23.4 million, an increase of 514,000 in the quarter. The company said it is on track to achieve its 25 million FTTP build target by December.

The firm noted "record customer demand" for Openreach FTTP in the quarter, with 574,000 net adds. Openreach broadband lines fell by 192,000.

Last month, BT and Verizon Communications Inc announced plans to combine their international businesses in a 50:50 joint venture. Verizon will pay BT an equalisation payment of USD625 million.

As a result of the deal, the International customer facing unit is now reported as a discontinued operation.

BT reconfirmed all financial 2027 and multi-year financial outlook metrics, as updated in June to reflect its continuing operations after the Verizon deal.

For financial 2027, and excluding the International business, BT expects adjusted group revenue between £17.1 billion and £17.6 billion, down from between £19.0 billion and £19.5 billion before the Verizon deal.

BT sees adjusted earnings before interest, tax, depreciation and amortisation between £8.1 billion and £8.2 billion, down from between £8.2 billion and £8.3 billion before, when including the International business.

Mid-term guidance for "sustained growth" for both metrics is unchanged.

Adjusted UK services revenue guidance is left unchanged for financial 2027 at between £15.1 billion to £15.4 billion.

In the financial year ended March 31, BT reported adjusted revenue of £19.65 billion, adjusted Ebitda of £8.23 billion, and adjusted UK services revenue of £15.45 billion.

Shares in BT were down 0.7% at 194.35 pence on Thursday morning in London.

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