REG - BT Group PLC - Results for the full year to 31 March 2025
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RNS Number : 6927J BT Group PLC 22 May 2025
Results for the full year to 31 March 2025
BT Group plc
22 May 2025
Allison Kirkby, Chief Executive, commenting on the results, said
"BT Group delivered strong progress against its strategic priorities in FY25,
as we stepped up the pace of build of the UK's leading next generation
networks. We set new record build and connect highs: our full fibre network
now reaches more than 18m homes and businesses, with more than 6.5m already
connected, and we were awarded the country's best mobile network for the 11th
year in a row recognising EE's clear leadership in 5G. We also accelerated the
pace of simplification and transformation, agreeing asset sales, improving
customer satisfaction across all of our brands and business segments, and
delivering over £900m of annualised cost savings.
"Although revenue declined year-on-year driven mainly by lower international
sales and handsets, strong cost control and a step-up in focus and
transformation resulted in growth in both EBITDA and normalised free cash
flow, allowing us to increase our dividend for FY25 by 2% to 8.16p per share.
"The momentum in, and impact of, our full fibre programme is such that we are
now raising our build target by 20% to up to 5m UK premises in FY26, keeping
us comfortably on track to reach 25m by the end of 2026, while maintaining our
cash flow guidance. We are now only one year away from our inflection to £2bn
of normalised free cash flow, our target for FY27, and remain on track to
deliver £3bn by the end of the decade.
"With the leadership team now in place to take our strategy forward, I am
confident that as we build and connect at pace, our transformation will
accelerate and deliver a better BT for all of us - our customers, our
colleagues, the country and our owners."
Strong delivery against our strategy
• Record FTTP build of 4.3m premises passed in the year; FTTP footprint
reached more than 18m premises, of which 4.9m in rural locations
• Record demand for Openreach FTTP with quarterly net adds above 500k
for the first time; total premises connected over 6.5m, increasing our
market-leading take up rate to 36%; Openreach broadband ARPU in the year grew
by 6% to £16.0, driven by higher FTTP take-up, speed mix and CPI
• Openreach broadband lines fell 243k in Q4, driven by losses to
competitors and a weaker broadband market; expect the H2 run rate to continue
through FY26
• New FTTP build target of up to 5m announced for FY26, to accelerate
FTTP benefits including take-up and underpinning the December 2026 target of
25m
• UK's best mobile network for the eleventh consecutive year as awarded
by RootMetrics; tenth year of best network with umlaut connect; best 5G
availability with speedtest; 5G standalone rolled out across 50 major UK towns
and cities, covering over 40% of the population
• Retail FTTP base grew by 33% year-on-year to 3.4m, of which Consumer
was 3.2m and Business was 0.2m; 5G base reached 13.2m, up 15% year-on-year
• Consumer customer bases relatively stable in the year with a return to
growth in the broadband base in Q4; Consumer broadband ARPU(1) up 2.4%
year-on-year to £42.2; Consumer postpaid mobile ARPU(1) £19.4 in line
year-on-year; Consumer fixed and mobile convergence grew to 24.6% from 22.9%
last year
• Business continued to refocus on the UK with disposals of operations
in Ireland and, after the period end, Italy; the Emergency Services Network
contract was secured for another seven years
• Transformation delivering ahead of plan with £913m of gross
annualised cost savings during FY25 at a cost to achieve in line with our plan
of £448m; energy usage in our networks was down 4% and total labour resource
was down 3% to 116k; we achieved a 10% reduction in Openreach repair volumes
• BT Group NPS improved to 29.5, up 4.7pts year-on-year, demonstrating
further improving customer experience across all three customer facing units
Continued EBITDA growth in FY25 and normalised free cash flow(2) ahead of
guidance
• Reported and adjusted(2) revenue £20.4bn, down 2%, mainly due to
continued challenging trading conditions in our Global and non-UK Portfolio
channels and weaker handset trading in Consumer, offsetting the benefit of
FTTP growth in Openreach and price increases; Adjusted UK service revenue(2)
£15.6bn, down 1%, largely due to legacy voice declines
• Adjusted(2) EBITDA £8.2bn, up 1%, driven by strong cost
transformation
• Reported profit before tax £1.3bn, up 12%, primarily due to goodwill
impairment in the prior year, offset by higher specific costs and net finance
expense
• Capital expenditure(2) ('capex') £4.9bn broadly in line with the
prior year
• Net cash inflow from operating activities £7.0bn; normalised free
cash flow(2) £1.6bn, up 25% due to higher EBITDA and a lower working capital
outflow
• Net debt £19.8bn (31 March 2024: £19.5bn), increased mainly due to
our scheduled pension scheme contributions of £0.8bn partly offset by free
cash flow
• Gross IAS 19 pension deficit of £4.1bn, a decrease from £4.8bn at 31
March 2024 mainly due to scheduled contributions
• Final dividend of 5.76 pence per share (pps) up from 5.69pps, bringing
the full year dividend to 8.16pps, up 2%
• FY26 Outlook: Adjusted(2) group revenue c£20bn and adjusted(2) UK
service revenue of £15.3-£15.6bn and EBITDA of £8.2-8.3bn; capital
expenditure excluding spectrum c. £5.0bn; normalised free cash flow(2) c.
£1.5bn
• Mid-term guidance: Adjusted(2) group revenue and adjusted(2) UK
service revenue sustained growth from FY27 and EBITDA growth ahead of revenue,
enhanced by cost transformation; capital expenditure excluding spectrum
reducing by more than £1bn from FY26 level; normalised free cash flow(2) of
c. £2.0bn in FY27 and c. £3.0bn by the end of the decade
(1) Consumer have reassessed the treatment of EE One and more specifically the
standalone selling price of each good and service provided to the customer
under the converged offering, and as such the allocation of the total
transaction price to be received under the contract to each distinct product.
This has resulted in a reclassification of revenues between product types.
(2) See Glossary on page 8.
Full year to 31 March 2025 2024 Change
Reported measures £m £m %
Revenue 20,358 20,797 (2)
Profit before tax 1,334 1,186 12
Profit after tax 1,054 855 23
Basic earnings per share 10.8p 8.7p 24
Net cash inflow from operating activities 6,989 5,953 17
Full year dividend 8.16p 8.00p 2
Capital expenditure 4,857 4,880 -
Adjusted measures £m £m %
Adjusted(1) revenue 20,370 20,835 (2)
Adjusted UK service revenue(1) 15,582 15,727 (1)
Adjusted(1) EBITDA 8,209 8,100 1
Adjusted(1) basic earnings per share 18.8p 18.5p 2
Normalised free cash flow(1) 1,598 1,280 25
Net debt(1) 19,816 19,479 2
Customer-facing unit updates
Adjusted(1) revenue Adjusted UK service revenue(1)
Full year to 31 March 2025 2024 Change 2025 2024 Change
£m £m % £m £m %
Consumer 9,695 9,833 (1) 7,888 7,916 -
Business 7,842 8,128 (4) 4,861 4,937 (2)
Openreach 6,156 6,077 1 6,156 6,077 1
Other 12 16 n/m 12 11 n/m
Intra-group items (3,335) (3,219) (4) (3,335) (3,214) (4)
Total 20,370 20,835 (2) 15,582 15,727 (1)
Adjusted(1) EBITDA Normalised free cash flow(1)
Full year to 31 March 2025 2024 Change 2025 2024 Change
£m £m % £m £m %
Consumer 2,644 2,672 (1) 1,025 1,023 -
Business 1,536 1,630 (6) 506 431 17
Openreach 4,029 3,827 5 839 590 42
Other - (29) n/m (772) (764) n/m
Total 8,209 8,100 1 1,598 1,280 25
Adjusted(1) revenue Adjusted UK service revenue(1) Adjusted(1) EBITDA
Fourth quarter to 31 March 2025 2024 Change 2025 2024 Change 2025 2024 Change
£m £m % £m £m % £m £m %
Consumer 2,361 2,370 - 1,928 1,909 1 659 664 (1)
Business 1,993 2,001 - 1,214 1,191 2 380 421 (10)
Openreach 1,505 1,503 - 1,505 1,503 - 942 924 2
Other 2 4 n/m 2 3 n/m (7) (31) n/m
Intra-group (812) (801) 1 (812) (801) (1) - - -
Total 5,049 5,077 (1) 3,837 3,805 1 1,974 1,978 -
Performance against FY25 outlook
FY25 outlook FY25 performance
Change in adjusted(1) revenue Down 1-2% Down 2%
Adjusted(1) EBITDA c. £8.2bn £8.2bn
Capital expenditure(1) <£4.8bn £4.9bn
Normalised free cash flow(1) c. £1.5bn £1.6bn
(1)See Glossary on page 8.
n/m: comparison not meaningful
Overview of the full year to 31 March 2025
Progress against our strategic priorities
Our ambition is to become the UK's most trusted connector of people, business
and society. By the end of the decade we aim to pass up to 30 million premises
with full fibre, have over 30 million retail customer connections to our
products and solutions, and generate £3bn of normalised free cash flow.
During FY25, we made strong progress against our strategic targets for
FY28-FY30:
• FTTP premises passed increased by 4.3m to 18.1m; target of 25-30m
• Openreach take-up increased to 36% and retail take-up increased by
0.8m to 3.4m; targets of 40-55% and 6.5-8.5m respectively
• 5G UK population coverage increased to 85% and 5G retail connections
increased by 1.7m to 13.2m; targets of >98% and 13.0m-14.5m respectively
• Total labour resource decreased by 4k to 116k; target of 75-90k
• Group Net Promoter Score of 29.5; target of 30-35
We are on track to deliver on our five-year £3bn cost reduction programme to
FY29, with 30% of our target or £0.9bn gross annualised cost savings achieved
in FY25 at a cost to achieve in line with our expectations of £0.4bn. The
remainder of the c£1.0bn cost to achieve will be reasonably evenly spread
across the remaining years. We now expect to have migrated all customers off
the PSTN by the end of January 2027, allowing us to align the programme with
full fibre broadband customer upgrades where available.
We disposed of non-UK assets in Ireland in FY25, and Italy after period end.
We are taking advantage of the efficiency of our full fibre build and
provisioning machine and raising our build target for this financial year by
20% to up to 5 million homes and businesses as well as connecting customers
beyond our initial targets. By the end of the decade capex will then decline
by >£1bn from the FY26 level.
Financial outlook
• We remain well positioned to deliver a strong increase in cash flow
and value through delivery of our focused strategy. Our outlook is underpinned
by confidence in our unrivalled assets, leading network position, strong
brands, ever-improving customer experience and continued focus on
transformation.
• In FY26 we expect adjusted(1) group revenue of c. £20bn and
adjusted UK service revenue(1) of between £15.3bn and 15.6bn, with
adjusted(1) EBITDA between £8.2bn and £8.3bn. Capital expenditure excluding
spectrum is expected to be around £5.0bn as we accelerate our FTTP build,
offset by c. £100m of forward copper sales, with normalised free cash flow
around £1.5bn.
• From FY27 to FY30, we expect sustained adjusted(1) group revenue and
adjusted UK service revenue(1) growth as legacy voice drags abate, and EBITDA
growth ahead of revenue enhanced by cost transformation. Capital expenditure
will reduce by more than £1bn from the FY26 level. We expect to deliver c.
£2.0bn in normalised free cash flow in FY27 and c. £3.0bn by the end of the
decade.
FY26 outlook End of decade
Adjusted(1) group revenue c. £20bn Sustained growth from FY27
Adjusted UK service revenue(1) £15.3-£15.6bn Sustained growth from FY27
Adjusted(1) EBITDA £8.2-£8.3bn Consistent and predictable growth ahead of revenue enhanced by cost
transformation
Capital expenditure(1) c. £5.0bn Reduces by >£1bn from FY26 level
Normalised free cash flow(1) c. £1.5bn c. £2.0bn in FY27
c. £3.0bn by end of decade
Dividend
• In line with our policy, we are today declaring a final dividend of
5.76 pence per share (pps), increasing our full year dividend to 8.16pps, a
year-on-year increase of 2% (FY24: 8.00pps).
• We reconfirm our progressive dividend policy which is to maintain or
grow the dividend each year whilst taking into consideration a number of
factors including underlying medium-term earnings expectations and the level
of business reinvestment
• The Board expects to continue with this policy for future years, and
to declare two dividends per year with the interim dividend being fixed at 30%
of the prior year's full year dividend
• The dividend will be paid on 10 September 2025 to shareholders on
the register of members on 8 August 2025. The ex-dividend date will be 7
August 2025
(1) See Glossary on page 8.
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