BT Group LON: BT.A said it met its financial guidance for the year ended March 31, 2026, as record fiber deployment and connections at Openreach helped offset pressure from equipment sales, legacy voice declines and weakness in its international operations.
Chief Executive Allison Kirkby said the company made “strong progress” during the year while remaining focused on its U.K.-centered strategy. She highlighted record full-fiber build and connection activity at Openreach, improved customer satisfaction across BT, EE and Plusnet, and continued cost transformation across the group.
“Financially, we met our guidance, and we grew our EBITDA,” Kirkby said. BT proposed a final dividend of 5.87 pence per share, taking the full-year dividend to 8.32 pence per share, up 2% from the prior year.
Openreach Posts Record Fiber Build and Connections
Openreach built to a record 4.8 million homes and businesses during the year, including 1.5 million in the final quarter, Kirkby said. The unit has now passed 23 million premises, or about two-thirds of the U.K., and remains on track to reach 25 million by the end of calendar 2026.
Kirkby said Openreach connected a record 2.2 million customers during the year and now has more than 9 million full-fiber customers, representing a 39% take-up rate. She said line losses improved, helped by lower losses to retail competitors, though wholesale alternative-network losses remained a headwind in what she described as a relatively flat broadband market.
The company expects Openreach broadband line losses to fall again in fiscal 2027 to around 800,000. Kirkby said the company is seeing signs that retail alternative-network competition is reducing.
Openreach revenue rose 1% for the year, driven by CPI-linked price increases and an improved fiber-to-the-premises mix, Chief Financial Officer Simon Lowth said. Adjusted EBITDA rose 5%, helped by revenue flow-through, lower fault rates and lower labor and energy costs, partly offset by pay inflation.
Group Revenue Falls, EBITDA Edges Higher Excluding Divestments
BT reported adjusted revenue of £19.6 billion, down 4% from the prior year. Lowth said the decline was mainly due to lower equipment sales and reduced revenue in International, including the effect of divestments. Adjusted U.K. service revenue fell 1%, though it returned to growth in the fourth quarter, rising 1%.
Adjusted operating costs before depreciation fell 6%, reflecting cost transformation and tight spending controls. Adjusted EBITDA was £8.23 billion, and excluding five divestments completed during the year, was up just under 1%.
Capital expenditure was £5.1 billion, about £100 million above guidance, which Lowth attributed to strong connection activity. Normalized free cash flow was £1.5 billion, in line with guidance but down from £1.6 billion in fiscal 2025.
Lowth said the company had achieved £580 million in annualized cost savings during the year, bringing total savings from its current transformation program to £1.5 billion over two years at a cost to achieve of £0.8 billion. BT’s total workforce, including subcontractors, fell 7%, while direct labor declined 10%.
Consumer Returns to Customer Growth; Business Remains Pressured by Voice
Kirkby said BT’s consumer unit grew customers across all three core consumer products for the first time in eight years. The company returned to service revenue growth in the second half, despite a roughly one percentage point drag from voice revenue ahead of the planned PSTN closure in January.
Consumer revenue declined 2% for the year, primarily because of lower handset volumes. Adjusted service revenue was flat, as higher customer bases offset modestly lower average revenue per user. Consumer EBITDA declined 2%, though Lowth said it would have been broadly flat excluding prior-year one-offs in the “mid-tens of millions” of pounds.
Kirkby said full fiber now accounts for more than half of BT’s consumer broadband base, while broadband churn fell during the year. EE One helped lift convergence to 27%, up two percentage points, and mobile churn remained at record lows.
In Business, revenue fell 2% and U.K. service revenue declined 1%, which Lowth said was driven entirely by voice declines. Business EBITDA fell 5%, reflecting pressure from high-margin legacy products, partly offset by cost management and modernization efforts. Kirkby said the division had won connectivity and security deals with BAE Systems, Northern Ireland Electricity Networks and EasyJet.
International Restructuring Continues
BT said it had divested five non-core businesses from its International division since carving it out as a standalone unit in July. Kirkby said the division remains under revenue pressure from legacy and managed contract declines, but delivered £70 million of cost transformation initiatives during the year.
The company is continuing to simplify International and upgrade customers to Global Fabric, its network-as-a-service platform. Kirkby said BT expects pro forma EBITDA growth in International in the current financial year.
BT Reaffirms Cash Flow Targets and Extends Transformation Plan
BT reaffirmed its target of £2 billion in normalized free cash flow for fiscal 2027 and £3 billion by fiscal 2030. Lowth said free cash flow is expected to rise as full-fiber build spending declines and IT modernization is completed, with capital expenditure expected to fall by more than £1 billion from fiscal 2026 to fiscal 2030.
The company extended its transformation program by one year. BT now expects the program, running from fiscal 2025 to fiscal 2030, to deliver £3.7 billion of gross cost savings at a cost to achieve of £1.4 billion. Lowth said the remaining £2.2 billion of gross savings would be delivered mostly in fiscal 2027 and fiscal 2028.
BT also narrowed its expected fiscal 2030 labor resource, including subcontractors, to the lower end of its prior 75,000-to-90,000 range, now targeting 75,000 to 80,000.
For fiscal 2027, BT expects total revenue of £19 billion to £19.5 billion, U.K. service revenue of £15.1 billion to £16.4 billion, and adjusted EBITDA of £8.2 billion to £8.3 billion. Kirkby said the U.K. service revenue outlook reflects a £150 million to £200 million drag from voice revenue as BT moves toward PSTN closure.
During the question-and-answer session, Lowth said BT would continue to grow the dividend by low- to mid-single digits annually until it reaches metrics consistent with a BBB+ credit rating. After that, he said residual cash flow could support enhanced shareholder distributions, potentially including special dividends or buybacks.
About BT Group LON: BT.A
BT Group is the UK's leading provider of fixed and mobile telecommunications and related secure digital products, solutions and services. We also provide managed telecommunications, security and network and IT infrastructure services to customers across 180 countries.
BT Group consists of three customer-facing units: Consumer serves individuals and families in the UK; Business* covers companies and public services in the UK and internationally; Openreach is an independently governed, wholly owned subsidiary wholesaling fixed access infrastructure services to its customers - over 650 communication providers across the UK.
British Telecommunications plc is a wholly owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group.
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