BT Group revenues top £5bn as price hikes boost Openreach sales

BT Group upheld its full-year forecasts following solid performances across all three of its business units and strong profit growth in the last quarter.

The telecoms firm’s revenue rose by 4 per cent to £5.16billion for the three months ending June, while pre-tax profits increased by 11 per cent to £536million.

Price hikes boosted turnover in its Openreach and consumer divisions, with an additional lift provided by strong demand for fibre-enabled products and better equipment trading in its business broadband segment.

Performance: BT Group has expanded its fibre-to-the-premises network to 11 million sites, still less than half its target to reach 25 million properties by 2026

Meanwhile, adjusted underlying earnings tipped above £2billion as revenue flow-through and cost management compensated for escalating inflation.

BT is aiming to save £3billion in annual costs by 2025 whilst also engaging in an ambitious investment programme to accelerate next-generation broadband across the UK.

During the quarter, the London-based company expanded its fibre-to-the-premises network to 11 million sites, still less than half its target to reach 25 million properties by 2026.

Customer numbers in its Openreach division jumped by more than 383,000 during the half.

However, its broadband base fell by 126,000, which it blamed on a weak broadband market, hefty competition, and communications providers discontinuing copper lines. 

Phillip Jansen, chief executive of BT, said: ‘We continue to drive transformation across the group, and while there remains much to do, it’s clear that our strategy is working and BT Group is set up for success.’ 

Jansen announced earlier this month that he would be standing down during the next year following a challenging tenure at the telecoms giant.

He declared his intention to leave soon after the firm revealed plans to slash 55,000 jobs by the end of this decade through greater automation and digitisation of operations. 

Since the former Worldpay boss took over in 2019, the company has significantly enlarged its full-fibre internet and 5G mobile offering, pledging to expand the latter to almost the whole of the UK by 2028.

It also merged its underperforming global and enterprise divisions into BT Business and forged a joint venture between its sports broadcasting arm and American media giant Warner Bros Discovery.

However, BT Group shares have almost halved under Jansen’s leadership as turnover has gradually suffered, and profits have come under pressure from lower equipment sales and rising inflation and interest rates.

They were 0.9 per cent down at 125.35p on Thursday morning, having been around 240p at the start of 2019.

Matthew Dorset, an equity research analyst at Quilter Cheviot, said: ‘While there is still pressure there from challengers and competitors, BT is a strong brand and will be able to better navigate a high interest rate environment than smaller competitors. With a new CEO incoming soon, BT is well placed for the future.’