REG - BT Group PLC - Half-year Financial Report
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RNS Number : 3947G BT Group PLC 06 November 2025
Results for the half year to 30 September 2025
BT Group plc
6 November 2025
Allison Kirkby, Chief Executive, commenting on the results, said:
"BT is delivering on its strategy in competitive markets. We're building the
UK's digital backbone, connecting the country like no one else and
accelerating our transformation. Openreach full fibre broadband now reaches
more than 20 million homes and businesses and our award-winning EE network is
live with 5G+ coverage for 66% of the population. Since the start of the year,
we've driven customer growth across Consumer broadband, mobile and TV and
we're stabilising our UK-focused Business division. Outside the UK, we've
completed strategic exits and we're reshaping our International unit. BT's
transformation is delivering ahead of plan, as our UK focus and radical
simplification and modernisation are helping to offset declines from our
International and legacy businesses and higher labour-related costs since the
start of this tax year.
"We remain on track to deliver our financial outlook for this year, our cash
flow inflection to c.£2.0bn in FY27 and c.£3.0bn by the end of the decade,
and we're announcing an increased interim dividend to 2.45 pence per share."
Delivering on our strategy in competitive markets
• Record FTTP build of over 2.2m in the 6 month period; FTTP footprint
reached 20.3m premises, of which 5.5m in rural locations; on track to build up
to 5m this fiscal year and reach our target of 25m by December 2026
• Record demand for Openreach FTTP with 1.1m net adds in H1; total
premises connected grew to over 7.6m, again increasing our market-leading
take-up rate, now 38%; Openreach broadband ARPU grew 4% year-on-year in H1 to
£16.7, driven by CPI-linked price increases, higher FTTP take-up and speed
mix
• Openreach broadband lines fell 242k in Q2, driven by losses to
competitors and a weaker broadband market; our expectation for FY26 remains
unchanged at twice the H2 FY25 run rate
• UK's best mobile network for a record-breaking twelfth consecutive
year as awarded by RootMetrics, delivering the UK's best 5G experience; '5G+'
standalone coverage up over 20ppts to 66% of the population and on track to
deliver to 99% of the UK population by the end of FY30
• Landmark agreement with Starlink announced, increasing broadband
choice in hard to reach areas
• Record retail FTTP base growth in H1 with Consumer up 476k to 3.7m and
Business up 44k to 0.3m; 5G base reached 13.9m, up 11% year-on-year
• Consumer customer bases grew for a third consecutive quarter in
broadband and a second consecutive quarter in postpaid mobile, with growth
also in TV; year-on-year Consumer broadband ARPU down 1.4% to £41.9 and
Consumer postpaid mobile ARPU down 1.6% to £19.3 year-on-year; we continue to
expect a return to year-on-year service revenue growth in H2; Consumer fixed
and mobile convergence increased to 25.9% from 23.1% this time last year
• Business unit now fully UK-focused, with a stabilising performance
• Transformation delivering ahead of plan with £247m gross annualised
cost savings during H1 FY26 and a cumulative total of £1.2bn realised in the
first 18 months of our £3bn programme; year-on-year energy usage in our
networks was down 5%, total labour resource was down 6% to 111k and Openreach
repair volumes were down 13%; plans advanced to reshape International
• BT Group NPS improved to 30.5, up 5.2pts year-on-year, demonstrating
further improving customer experience
Financial performance on track; full year guidance reconfirmed
• Reported and adjusted(1) revenue £9.8bn, down 3%, due to declines in
legacy voice, lower mobile handset trading volumes and declines in
International, offset by an improving FTTP mix in Openreach
• Adjusted UK service revenue(1) £7.7bn, down 1%, due to declines in
legacy voice and a competitive retail pricing environment, offset by an
improving FTTP mix and price increases
• Adjusted(1) EBITDA £4.1bn, flat year-on-year, with strong cost
transformation and cost control offsetting revenue flow through and higher
National Insurance and National Living Wage costs
• Reported profit before tax £862m, down 11%, primarily driven by
higher depreciation and amortisation from a higher asset base, and net finance
expense driven by increased interest rates, offset by lower specific costs
• Capital expenditure(1) ('capex') £2.4bn, up 8%, reflecting increased
FTTP provisioning and build activity
• Net cash inflow from operating activities £2.8bn; normalised free
cash flow(1) £0.4bn, down £0.3bn due to higher cash capex, the absence of a
prior year tax refund and lower net cash flows from working capital programmes
• Net debt £20.9bn (31 March 2025: £19.8bn), increasing mainly due to
scheduled pension contributions of £0.8bn and the payment of the full year
dividend partially offset by cash from trading activities
• Gross IAS 19 pension deficit of £3.9bn, a decrease from £4.1bn at 31
March 2025, mainly due to scheduled contributions offset by a decrease in
credit spreads
• Interim dividend of 2.45 pence per share (pps) up 2% from 2.40pps in
H1 FY25 in line with our policy of paying 30% of prior year's full year
dividend pps
• FY26 Outlook reconfirmed: Adjusted(1) group revenue c£20bn, adjusted
UK service revenue(1) of £15.3-£15.6bn and EBITDA of £8.2-£8.3bn; capital
expenditure(1) excluding spectrum c. £5.0bn; normalised free cash flow(1) c.
£1.5bn
• Mid-term guidance reconfirmed: Adjusted(1) group revenue and adjusted
UK service revenue(1) sustained growth from FY27 and EBITDA growth ahead of
revenue, enhanced by cost transformation; capital expenditure(1) excluding
spectrum reducing by more than £1bn from FY26 level; normalised free cash
flow(1) of c. £2.0bn in FY27 and c. £3.0bn by the end of the decade
Half year to 30 September 2025 2024 Change
Reported measures £m £m %
Revenue 9,810 10,117 (3)
Profit before tax 862 967 (11)
Profit after tax 651 755 (14)
Basic earnings per share 6.70p 7.80p (14)
Net cash inflow from operating activities 2,765 3,009 (8)
Half year dividend 2.45p 2.40p 2
Capital expenditure(1,4) 2,443 2,269 8
Adjusted measures £m £m %
Adjusted(1) revenue 9,806 10,138 (3)
Adjusted UK service revenue(1) 7,726 7,827 (1)
Adjusted(1) EBITDA 4,126 4,132 -
Adjusted(1) basic earnings per share 9.30p 10.70p (13)
Normalised free cash flow(1) 408 715 (43)
Capital expenditure(1) excluding spectrum 2,442 2,269 8
Net debt(1,3) 20,853 20,267 3
Customer-facing unit updates
Adjusted(1) revenue Adjusted UK service revenue(1)
Half year to 30 September 2025 2024 Change 2025 2024 Change
re-presented(2) re-presented(2)
£m £m % £m £m %
Consumer 4,684 4,836 (3) 3,932 3,989 (1)
Business 2,589 2,644 (2) 2,370 2,398 (1)
International 1,110 1,220 (9) - - -
Openreach 3,131 3,118 - 3,131 3,118 -
Other 6 5 n/m 5 5 n/m
Intra-group items (1,714) (1,685) 2 (1,712) (1,683) 2
Total 9,806 10,138 (3) 7,726 7,827 (1)
Adjusted(1) EBITDA Normalised free cash flow(1)
Half year to 30 September 2025 2024 Change 2025 2024 Change
re-presented(2) re-presented(2)
£m £m % £m £m %
Consumer 1,274 1,330 (4) 540 817 (34)
Business 647 656 (1) 164 97 69
International 66 91 (27) (149) (109) (37)
Openreach 2,148 2,059 4 296 355 (17)
Other (9) (4) n/m (443) (445) n/m
Total 4,126 4,132 - 408 715 (43)
Adjusted(1) revenue Adjusted UK service revenue(1) Adjusted(1) EBITDA
Second quarter to 30 September 2025 2024 Change 2025 2024 Change 2025 2024 Change
re-presented(2) re-presented(2) re-presented(2)
£m £m % £m £m % £m £m %
Consumer 2,352 2,437 (3) 1,970 1,998 (1) 638 671 (5)
Business 1,302 1,327 (2) 1,187 1,200 (1) 324 326 (1)
International 568 606 (6) - - - 45 43 5
Openreach 1,565 1,560 - 1,565 1,560 - 1,080 1,038 4
Other 3 2 n/m 3 2 n/m (11) (7) n/m
Intra-group (863) (846) 2 (862) (844) 2 - - -
Total 4,927 5,086 (3) 3,863 3,916 (1) 2,076 2,071 -
Prior period comparatives
Throughout this release, comparative financial information for the half year
to 30 September 2024 ('H1 FY25') has been re-presented to reflect the
formation of the new International CFU and re-presentations of segmental
revenue to reflect the nature of services and trading relationships between
CFUs. Note 17 on page 28 and Additional Information on page 34 presents a
bridge between financial information for the half year to 30 September 2024 as
published on 7 November 2024, and the comparatives presented in this release.
For further information see bt.com/about (https://www.bt.com/about) for a
separate publication covering the formation of International.
(1 ) See Glossary on page 10.
(2 ) H1 and Q2 FY25 comparative information for the Business CFU has been
re-presented to reflect the formation of the new International CFU and
re-presentations of segmental revenue to reflect the nature of services and
trading relationships between CFUs. Note 17 on page 28 presents a bridge
between financial information for the half year to 30 September 2024 as
published on 7 November 2024, and the comparatives presented in this release.
(3 ) Net debt was £19,816 at 31 March 2025.
(4 ) Includes spectrum investment of £1m.
n/m: comparison not meaningful
Overview of the half year to 30 September 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 H1 FY26, we made strong progress against our strategic targets for
FY28-FY30:
• FTTP premises passed increased by 2.2m to over 20m; target of 25-30m
• Openreach take-up increased to 38% and retail take-up increased by
0.6m to 4.0m; targets of 40-55% and 6.5-8.5m respectively
• 5G UK population coverage increased to 89% and 5G retail connections
increased by 0.7m to 13.9m; targets of 99% and 13.0m-14.5m respectively
• 5G+ population coverage increased to 66%; target of 99%
• Total labour resource decreased by 5k to 111k; target of 75-90k
• Group Net Promoter Score increased to 30.5, up 5.2pts year-on-year;
target of 30-35
We are delivering ahead of our five-year £3bn cost reduction programme to
FY29, with £247m gross annualised cost savings during H1 FY26 for a
cumulative total of £1.2bn in the first 18 months. This was at a cost to
achieve of £134m in H1 FY26, for a cumulative total of £581m, in line with
our expectations.
We have now agreed or completed our targeted international disposals during
FY26. We entered into an agreement to sell BT Radianz in September 2025. In
addition, we completed the sale of our domestic operations in Ireland in
September 2025 and the sale of both BT Italia and our datacentre business in
Ireland during October 2025. These divestments align with the Group's strategy
to focus on UK connectivity and reshape our International unit.
Financial outlook
• All FY26 guidance and mid-term outlook reiterated
• 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 an interim dividend of
2.45 pence per share (pps), (H1 FY25: 2.40pps), which is 30% of last year's
full dividend
• 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 11 February 2026 to shareholders on the
register of members on 30 December 2025. The ex-dividend date will be 29
December 2025
(1 ) See Glossary on page 10.
Group results for the half year to 30 September 2025
Income statement
• Reported revenue was £9,810m, down 3% mainly due to declines in
legacy voice across the group, continued weaker handset trading in Consumer,
and International. This was offset through the improvement of FTTP mix and
price increases in Openreach
• Adjusted(1) UK service revenue for the year was £7,726m (H1 FY25:
£7,827m). This is down 1% due to declines in legacy voice and softer retail
pricing, offset by an improving FTTP mix and CPI-linked price increases in
Openreach
• Reported operating costs were £8,329m, down 3% year-on-year due to
continued cost transformation including lower total labour resource primarily
in Openreach, lower mobile equipment volumes and the lower trading in
International
• Adjusted(1) EBITDA of £4,126m, flat year-on-year with strong cost
transformation and cost control offsetting revenue flow through and higher
National Insurance and National Living Wage costs
• Reported profit before tax of £862m, down 11%, primarily driven by
higher depreciation and amortisation from a higher asset base and increased
interest, offset by lower specific costs
Specific items (Note 5 to the condensed consolidated financial statements)
• Specific items resulted in a net charge after tax of £259m (H1
FY25: £288m). The main components were restructuring charges of £134m (H1
FY25: £187m) and interest expense on retirement benefit obligation of £96m
(H1 FY25: £99m). Specific operating costs were £232m (H1 FY25: £245m)
Tax
• The effective tax rate on reported profit was 24.5% (H1 FY25: 21.9%)
and on adjusted(1) profit was 23.3% (H1 FY25: 21.7%). These are lower than the
UK corporation tax rate of 25% primarily due to the UK patent box tax regime
• We made a net corporation tax payment of £28m (H1 FY25: £72m
refund) driven by overseas tax payments
• We expect a large proportion of our capital expenditure to be
eligible for full expensing which will reduce our current year UK tax
liability
Capital expenditure
• Capital expenditure(1) was £2,443m, up 8% on H1 FY25 with higher
FTTP build and provision volumes in Openreach, as we continue to accelerate
our build
• Cash capital expenditure was £2,590m, up 5% with the difference to
reported capital expenditure due to the timing of capital creditor spend and
government grant funding repayments
Net cash inflow from operating activities and normalised free cash flow
• Net cash inflow from operating activities was £2,765m, down 8%
driven by lower net cash flows from sale of receivables and the absence of a
prior year tax refund, offset by timing of working capital
• Normalised free cash flow(1) was £408m, down 43% due to higher cash
capex, the absence of a prior year tax refund and lower net cash flows from
working capital programmes. A reconciliation of our working capital programmes
is shown in Additional Information on page 35.
• Net cash cost of specific items adjusted from normalised free cash
flow(1) was £242m (H1 FY25: £270m), primarily relating to restructuring
payments
Net debt and liquidity
• Net debt(1) at 30 September 2025 was £20.9bn (31 March 2025:
£19.8bn), increasing mainly due to scheduled pension contributions of £0.8bn
and the payment of the full year dividend partially offset by cash from
trading
• Net financial debt (which excludes lease liabilities) at 30
September 2025 was £16.4bn (31 March 2025: £15.2bn)
• BT Group holds cash and current investment balances of £2.0bn; the
current portion of loans and other borrowings is £1.7bn
• Our £2.1bn undrawn committed borrowing facility, which matures no
earlier than January 2030 with the option to extend for two further years,
remains undrawn at 30 September 2025
• We remain committed to our credit rating target of BBB+/Baa1 and
minimum rating of BBB/Baa2
• During H1 FY26 our credit ratings have remained unchanged at BBB or
equivalent with stable outlook
Pensions (Note 6 to the condensed consolidated financial statements)
• The IAS 19 deficit has decreased to £3.9bn at 30 September 2025,
net of tax £2.9bn (31 March 2025: £4.1bn, net of tax £3.2bn), primarily due
to scheduled contributions offset by a decrease in credit spreads and higher
real interest rates since year-end
• The 2023 BTPS funding valuation included a future funding commitment
for BT to provide additional deficit contributions should the funding deficit
be more than £1bn behind plan at two consecutive semi-annual assessment
dates. At the 30 June 2025 assessment date, the funding position was within
this limit
Principal risks and uncertainties
Details of the group's principal risks and uncertainties is provided in note
16
(1 ) See Glossary on page 10.
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