Record fibre demand and cost savings help BT shore up earnings (updated)

Vodafone

21/05/2026 07:55

BT adds 2.2 million fibre connections, now covers over two-thirds of UK homes

New dividend policy set, free cash flow forecast to rise to £3 billion by 2030

BT loses 825,000 lines as customers switch to rivals

Expects further losses this year

Adds share performance in paragraph 4, further CEO comments and dividend policy and background paragraphs 5-6, 10

By Paul Sandle

LONDON, May 21 (Reuters) - BT BT.L, Britain's biggest telecoms group, said it added 2.2 million fibre connections in the year to end-March, helping it offset pricing pressure and weakness in its international unit to deliver flat core earnings.

Chief Executive Allison Kirkby said the company's full-fibre network now reached more than two-thirds of Britain's homes and businesses, putting it "well on track" to reach its target of 25 million by the end of December.

"We are building the UK's digital backbone even faster and further, connecting the country like no one else and accelerating our transformation," she said.

Shares in BT have risen by 36% in the last 12 months on the prospect of stronger cash flow after the bulk of its fibre build had passed. They dipped 2% in early deals on Thursday as investment firm Hargreaves Lansdown said the results were "light on fireworks" but did what they needed to do.

RETURNING CASH TO SHAREHOLDERS

BT set a new dividend policy as it reiterated that free cash flow would rise from £1.5 billion ($2.02 billion) in the last financial year to around £2 billion this year and £3 billion by the end of the decade.

It announced a full-year payout of 8.32 pence a share, and Kirkby said it would rise by a low- to mid-single-digit percentage from this year onwards until BT reached its aim of a triple-B-plus credit rating, and thereafter it would return surplus cash to shareholders.

BT met expectations with a 3% drop in revenue to £19.7 billion and flat core earnings of £8.2 billion, with the latter also boosted by cost savings.

Take-up of fibre across its Openreach network, which is also used by rivals such as Sky and Vodafone VOD.L, reached a market-leading 38%, it said.

But the network as a whole lost 825,000 lines as some customers switched to alternative fibre networks. BT said it expected to lose about another 800,000 this year.

Earlier this month BT announced the return of its main BT brand in mobile, a final step in reversing a previous strategy to focus on its EE brand for consumers.

Kirkby said the use of all its brands - BT, EE and Plusnet - had helped its consumer division return to customer growth across broadband, mobile and TV.

($1 = 0.7444 pounds)

 (Reporting by Paul Sandle; Editing by Sarah Young and Emelia Sithole-Matarise)

 ((paul.sandle@thomsonreuters.com; +44 20 7542 6843; Reuters Messaging: paul.sandle.thomsonreuters.com@reuters.net))