REG - British Telecom PLC - Half-year Financial Report
14/11/2025 17:15
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RNS Number : 6639H British Telecommunications PLC 14 November 2025
British Telecommunications plc
Results for the half year to 30 September 2025
14 November 2025
About BT
British Telecommunications plc ('BT' or 'group') is a wholly-owned subsidiary
of BT Group Investments Limited, which
encompasses virtually all businesses and assets of the BT Group. The ultimate
parent company is BT Group plc, which is
listed on the London Stock Exchange.
BT Group is the UK's leading provider of fixed and mobile telecommunications
and related secure digital products, solutions and services.
BT Group consists of four customer-facing units: Consumer serves individuals
and families in the UK; Business covers companies and public services in the
UK; International serves multinational organisations headquartered outside the
UK and overseas public sector customers; Openreach is an independently
governed, wholly owned subsidiary wholesaling fixed access infrastructure
services to its customers - over 700 communication providers across the UK.
From 1 July 2025, BT completed the reorganisation of its former combined
Business operations, creating distinct UK-focused Business and International
units. Business now serves UK customers exclusively, while International
focuses on multinational corporations and overseas public sector clients. This
reorganisation, alongside strategic exits and reshaping International,
supports the UK focus and transformation agenda, driving simplification and
growth in line with medium-term plans previously announced.
The directors at 30 September 2025 were Simon Lowth, Neil Harris, Edward
Heaton, Daniel Rider and Helen Charnley. On 14 April 2025, Roger Eyre resigned
as director and Helen Charnley was appointed as director on the same date.
Half year to 30 September 2025 2024 Change
Reported measures £m £m %
Revenue 9,810 10,117 (3)
Profit before tax 1,192 1,349 (12)
Profit after tax 981 1,137 (14)
Capital expenditure(1,3) 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 4,125 4,133 -
Capital expenditure(1) excluding spectrum 2,442 2,269 8
Customer-facing unit updates
Adjusted(1) revenue Adjusted UK service revenue(1) Adjusted(1) EBITDA
Half year 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 4,684 4,836 (3) 3,932 3,989 (1) 1,274 1,330 (4)
Business 2,589 2,644 (2) 2,370 2,398 (1) 647 656 (1)
International 1,110 1,220 (9) - - - 66 91 (27)
Openreach 3,131 3,118 - 3,131 3,118 - 2,148 2,059 4
Other 6 5 n/m 5 5 n/m (10) (3) 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) 4,125 4,133 -
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 15 on page 25 and Additional Information on page 30 present a
bridge between financial information for the half year to 30 September 2024 as
published on 18 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.
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 £8,330m, 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 £4,125m, 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 £1,192m, down 12%, 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 17.7% (H1 FY25: 15.7%)
and on adjusted(1) profit was 18.2% (H1 FY25: 16.9%). These are lower than the
UK corporation tax rate of 25% primarily due to the UK patent box tax regime
and the inclusion of group relief for nil payment
• 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
Cash flow
• Net cash inflow from operating activities was £2,765m, down 7%
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
Balance Sheet
• The 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
(1 ) See Glossary on page 7.
Operating review
Measures discussed in the operating review are on an adjusted basis and unless
otherwise stated commentary is on half year results. For a definition of
adjusted , see Glossary on page 7.
Consumer: Winning customers in a competitive market, with accelerating fibre
and converged households
Half year to 30 September
2025 2024 Change
£m £m £m %
Revenue(1) 4,684 4,836 (152) (3)
Of which UK service revenue(1) 3,932 3,989 (57) (1)
Operating costs(1) 3,410 3,506 (96) (3)
EBITDA(1) 1,274 1,330 (56) (4)
Depreciation & amortisation(1) 849 873 (24) (3)
Operating profit(1) 425 457 (32) (7)
Capital expenditure(1) 567 570 (3) (1)
Financial metrics
• Revenue(1) decline of 3% was primarily driven by lower mobile
handset trading volumes and a decline in service revenue in a competitive
market
• UK service revenue declined by 1% and was broadly flat excluding
legacy voice declines. While we grew our customer bases in broadband, postpaid
mobile and TV and achieved a higher FTTP mix within broadband, this was more
than offset by competitive pricing pressure in mobile and broadband, as well
as ongoing declines in legacy voice
• EBITDA(1) declined by 4%. Revenue flow-through and higher input
costs from Openreach were largely mitigated by disciplined cost control, but
EBITDA was further impacted by two additional pressures: increases in National
Insurance / National Living Wage and incremental drags as we move towards the
closure of the PSTN network in January 2027
• Depreciation and amortisation(1) was down, driven by lower digital
and network depreciation offset by increased customer premises equipment
depreciation
• Capital expenditure(1) was down 1%
Operational metrics
• Postpaid mobile ARPU £19.3, down 1.6% year-on-year. Base at 13.9m
with net adds of 61k during H1. Churn remains low at 1.0%
• Broadband ARPU £41.9, down 1.4% year-on-year. Base at 8.2m with net
adds of 12k during H1. Churn has remained at 1.2% despite an increasingly
competitive broadband market with Consumer adversely impacted in areas where
we do not have FTTP. TV base up 36k during H1
• Record breaking growth in the FTTP base with an increase of 476k in
H1; the FTTP base was 3.7m customers, up 32% year-on-year, now 45% of the
total base. 5G Connected base continues to grow with 11.2m customers, up 7%
year-on-year
• Our converged base continued to grow, up to 25.9% (H1 FY25: 23.1%)
of all broadband and mobile customers now taking both services
• EE won the RootMetrics UK's Best Network award for the twelfth
consecutive year, coming first in 127 of 128 categories, delivering the UK's
best 5G experience and highest average download speed and won Retailer of the
Year at the 2025 Mobile Industry Awards for the second consecutive year
• Consumer NPS slightly down, 0.3pts year-on-year, but up in the last
6 months
( )
(1 ) Financials and commentary are based on adjusted measures; see Glossary
on page 7.
Business: Showing signs of stability, as transformation steps up
Half year to 30 September
2025 2024 Change
re-presented(2)
£m £m £m %
Revenue(1) 2,589 2,644 (55) (2)
Of which UK service revenue(1) 2,370 2,398 (28) (1)
Operating costs(1) 1,942 1,988 (46) (2)
EBITDA(1) 647 656 (9) (1)
Depreciation & amortisation(1) 372 360 12 3
Operating profit(1) 275 296 (21) (7)
Capital expenditure(1) 268 269 (1) -
Since 1 July Business is focused on serving customers based in the UK, with
the separation of overseas activities into International; prior periods have
been re-presented.
Financial metrics
• Revenue(1) down 2% driven by legacy voice decline and equipment
trading, partially offset by growth in voice over IP
• UK service revenue(1) down 1% driven by legacy voice decline,
partially offset by growth in voice over IP
• EBITDA(1) decline of 1%, mainly due to revenue flow-through,
partially offset by cost transformation and a benefit of cost phasing across
the year
• Depreciation and amortisation(1) growth driven by higher network,
digital and customer equipment investment
• Capital expenditure(1) was flat, with continued investment in
customer driven equipment and transformation
Operational metrics
• FTTP base increased 42% year-on-year to 275k. 5G base increased 33%
year-on-year to 2.8m
• Q2 Corporate & Public Sector sales order value up 16%
year-on-year, including new business in the industrials sector
• Simplified the product portfolio to 193, on the way to achieve the
ambition to halve the number of products from more than 300 to 150; units on
legacy networks decreased by 38% year-on-year
• NPS grew to 30.6, up 8.3pts year-on-year primarily driven by
improvements in SMB channel
( )
( )
(1 ) Financials and commentary are based on adjusted measures; see Glossary
on page 7.
(2) H1 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 15 on page 25 and the Additional
Information on page 30 present bridges between financial information for the
half year to 30 September 2024 as published on 18 November 2024, and the
comparatives presented in this release.
International: Plans advanced to reshape; divestment of non-core businesses
Half year to 30 September
2025 2024 Change
re-presented(2)
£m £m £m %
Revenue(1) 1,110 1,220 (110) (9)
Operating costs(1) 1,044 1,129 (85) (8)
EBITDA(1) 66 91 (25) (27)
Depreciation & amortisation(1) 102 117 (15) (13)
Operating profit(1) (36) (26) (10) (38)
Capital expenditure(1) 53 59 (6) (10)
International was formed on 1 July 2025 to focus on serving multinational
corporations. Its strategic ambition is to become the global leader in secure,
multi-cloud connectivity, anchored by next-gen platforms Global Fabric and
Global Voice; prior periods have been re-presented.
Financial metrics
• Revenue(1) declined by 9%; agreed or completed divestments accounted
for 4ppts of this, adverse foreign exchange accounted for over 1ppt, with the
remainder driven by declines in legacy products and managed contracts
• EBITDA(1) declined by 27%, due to revenue flow-through, inflationary
cost pressures and increased investment in Global Fabric, partially offset by
tight cost control and ongoing transformation initiatives
• Depreciation and amortisation(1) decreased, largely reflecting the
reclassification of assets as held for sale in line with the completion of
strategic business exits
• Capital expenditure(1) down 10%
Operational metrics
• Cost transformation plan advanced within our £3bn transformation
programme to reduce office locations and simplify the product portfolio
• During the period, we entered into two sale agreements for the
remaining disposal groups classified as held for sale at 31 March 2025, the
most significant of which was for the disposal of BT Radianz to Transaction
Network Services which was entered into in September 2025. During September we
completed on the sale of BT Communications Ireland Ltd and post period end we
completed the sale of BT Italia and our datacentres business in Ireland
• NPS was up year-on-year with improved scores from key customers
( )
( )
(1 ) Financials and commentary are based on adjusted measures; see Glossary
on page 7.
(2 ) H1 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 15 on page 25 and the Additional
Information on page 30 present bridges between financial information for the
half year to 30 September 2024 as published on 18 November 2024, and the
comparatives presented in this release.
Openreach: Record FTTP build and take-up; continued EBITDA growth
Half year to 30 September
2025 2024 Change
£m £m £m %
Revenue(1) 3,131 3,118 13 -
Of which UK service revenue(1) 3,131 3,118 13 -
Operating costs(1) 983 1,059 (76) (7)
EBITDA(1) 2,148 2,059 89 4
Depreciation & amortisation(1) 1,053 974 79 8
Operating profit(1) 1,095 1,085 10 1
Capital expenditure(1) 1,529 1,329 200 15
( )
Financial metrics
• Revenue(1) was flat year-on-year. CPI-linked price increases and an
improved FTTP mix in broadband were offset by declines in the broadband and
voice-only customer base
• EBITDA(1) increased by 4%, driven by ongoing cost transformation
including the benefit of lower repair volumes, lower total labour resource and
lower energy costs. These were partially offset by pay inflation
• Depreciation and amortisation(1) increased, reflecting continued
investment in network build
• Capital expenditure(1) grew due to increased FTTP provisioning and
build activity
( )
Operational metrics
• Q2 saw record build with Openreach passing 1.2m premises with FTTP,
at an average build rate of 90k per week in the quarter, reaching a footprint
of over 20.3m, of which 5.5m are in more rural and less competitive areas
(Area 3 as defined by Ofcom(2))
• Total FTTP connected base surpassed 7.6m. Net adds of 550k in the
quarter are 23% higher year-on-year, reaching a record 1.1m in the half year,
increasing our market-leading take-up to 38% on a fast-growing footprint
• Openreach broadband lines fell by 242k, driven by higher losses to
wholesale competitors, a weaker broadband market and 15k of dual line ceases;
our full year estimate remains unchanged from that given in May
• Openreach broadband ARPU of £16.7 was up 4% on Q2 last year driven
by the CPI linked price increase and greater FTTP take-up
• Openreach achieved 30/30 Ofcom Copper Quality of Service measures
• Openreach delivered a solid performance for on time FTTP provision
of 89.5% in Q2
• End customer satisfaction was solid in Q2 with 92% of our
independent customer survey responses scoring Openreach between 8 and 10 (out
of 10), helping to maintain an 'Excellent' Trustpilot rating based on over
247k reviews, with 83% of reviews rated as '5 star'
( )
( )
( )
( )
(1 ) Financials and commentary are based on adjusted measures; see Glossary
on page 7.
(2 ) Area 3: Postcode sectors where Ofcom determined there is not, and
there is unlikely to be potential for, material and sustainable competition to
BT in the commercial deployment of competing networks.
(
)
Glossary
Adjusted Adjusted measures (including adjusted revenue, adjusted operating costs and
adjusted operating profit) are before specific items. Adjusted results are
consistent with the way that financial performance is measured by management
and assist in providing an additional analysis of the reporting trading
results of the group.
Adjusted EBITDA Earnings before interest, tax, depreciation and amortisation, before specific
items, share of post tax profits/losses of associates and joint ventures and
net finance expense.
Capital expenditure Additions to property, plant and equipment and intangible assets in the
period.
Adjusted UK service revenue Adjusted UK service revenue comprises all UK revenue less UK equipment
revenue. Some revenue from equipment is included within adjusted UK service
revenue where this is sold as part of a managed services contract or where
that equipment cannot be practicably separated from the underlying service. UK
revenue excludes International revenue.
Re-presented We have re-presented certain H1 FY25 comparatives to reflect changes in the
Group's internal reporting structure. The International CFU was separated from
Business forming a new CFU, effective from 1 July 2025.
In addition, two re-presentations have been made to segmental revenue
reporting, consistent with the information now provided to the BT Group
Executive Committee, which is the key management committee and represents the
'chief operating decision maker' (CODM):
• Certain Openreach pass-through services previously reported as
external revenue in Business have been reclassified to Openreach to reflect
the customer relationship. As a result of this change the prior year
comparatives have been re-presented to present revenue on a consistent basis
resulting in a £46m reduction in Business segment revenue for the half year
to 30 September 2024, with no impact on Openreach segmental revenue due to the
intra-group nature of the transaction.
• Following an update to the commercial terms governing a trading
relationship between EE and BT Wholesale, BT Wholesale will now recognise
services provided to EE as part of this trading relationship as intersegment
revenue. Previously, these services were internally reported as cost recovery.
This change results in the recognition of revenue within the Business segment.
As a result of this change the prior year comparatives have been re-presented
to present revenue and cost for the segment on a consistent basis. The effect
of this change is to increase Business revenue by £42m, with a corresponding
increase in cost.
Specific items Items that in management's judgement need to be disclosed separately by virtue
of their
size, nature or incidence. In the current period these relate to our
assessment of our
provision for historic regulatory matters, impairment loss on remeasurement of
held for sale items, increase in litigation provisions, restructuring charges,
divestment-related items, Sports JV-related items and net interest expense on
pensions. In determining whether an event or transaction is specific,
management considers quantitative as well as qualitative factors such as the
frequency or predictability of occurrence.
We assess the performance of the group using a variety of alternative
performance measures. Reconciliations from the most directly comparable IFRS
measures are in Additional Information on page 30.
Condensed consolidated financial statements
Group income statement
Half year to 30 September 2025 Note Before Specific Total
specific items (Reported)
items (note 5)
(Adjusted)
£m £m £m
Revenue 2,3 9,806 4 9,810
Operating costs 4 (8,098) (232) (8,330)
Of which net impairment losses on trade receivables and contract assets (80) - (80)
Operating profit (loss) 1,708 (228) 1,480
Finance expense (596) (96) (692)
Finance income 413 - 413
Net finance expense (183) (96) (279)
Share of post tax profit (loss) of associates and joint ventures (9) - (9)
Profit (loss) before tax 1,516 (324) 1,192
Taxation (276) 65 (211)
Profit (loss) for the period 1,240 (259) 981
Half year to 30 September 2024 Note Before Specific Total
specific items (Reported)
items (note 5)
(Adjusted)
£m £m £m
Revenue 2,3 10,138 (21) 10,117
Operating costs 4 (8,353) (245) (8,598)
Of which net impairment losses on trade receivables and contract assets (75) - (75)
Operating profit (loss) 1,785 (266) 1,519
Finance expense (538) (99) (637)
Finance income 470 - 470
Net finance expense (68) (99) (167)
Share of post tax profit (loss) of associates and joint ventures (3) - (3)
Profit (loss) before tax 1,714 (365) 1,349
Taxation (289) 77 (212)
Profit (loss) for the period 1,425 (288) 1,137
( )
( )
(
)
Group statement of comprehensive income
Half year ended 30 September
2025 2024
£m £m
Profit for the period 981 1,137
Other comprehensive income (loss)
Items that will not be reclassified to the income statement
Remeasurements of the net pension obligation (488) (224)
Tax on pension remeasurements 122 56
Items that have been or may be reclassified subsequently to the income
statement
Exchange differences on translation of foreign operations (36) (97)
Fair value movements on assets at fair value through other comprehensive 2 (6)
income
Movements in relation to cash flow hedges:
- net fair value (losses) gains 20 (397)
- recognised in income and expense (112) 533
Share of post tax other comprehensive income in associates and joint ventures 11 (4)
Tax on components of other comprehensive income that have been or may be 22 (35)
reclassified
Other comprehensive income (loss) for the period, net of tax (459) (174)
Total comprehensive income (loss) for the period 522 963
( )
( )
( )
(
)
Group balance sheet
Note 30 September 2025 31 March 2025
£m £m
Non-current assets
Goodwill 12 7,282 7,310
Other intangible assets 4,849 5,123
Property, plant and equipment 23,966 23,380
Right-of-use assets 3,177 3,328
Derivative financial instruments 871 904
Investments(1) 11,969 12,455
Joint ventures and associates 10 224 252
Trade and other receivables 672 655
Preference shares in joint venture 10 157 234
Contract assets 295 306
Retirement benefit surplus 6 151 142
Deferred tax assets 1,073 959
54,686 55,048
Current assets
Inventories 360 331
Trade and other receivables 3,102 3,119
Preference shares in joint ventures 10 220 161
Contract assets 1,061 1,194
Assets classified as held for sale 11 338 245
Current tax receivable 355 355
Derivative financial instruments 169 130
Investments 1,631 2,631
Cash and cash equivalents 353 209
7,589 8,375
Current liabilities
Loans and other borrowings 1,689 2,092
Derivative financial instruments 99 106
Trade and other payables 5,496 5,873
Contract liabilities 881 899
Lease liabilities 754 705
Liabilities held for sale 11 135 188
Current tax liabilities 76 82
Provisions 240 258
9,370 10,203
Total assets less current liabilities 52,905 53,220
Non-current liabilities
Loans and other borrowings 17,822 16,670
Derivative financial instruments 317 391
Contract liabilities 265 257
Lease liabilities 3,596 3,866
Retirement benefit obligations 6 4,032 4,230
Other payables 167 276
Deferred tax liabilities 1,870 1,717
Provisions 359 382
28,428 27,789
Equity
Share capital 2,172 2,172
Share premium 8,000 8,000
Other reserves 1,432 1,535
Retained earnings 12,873 13,724
Total equity 24,477 25,431
52,905 53,220
( )
(1) £11,949m (31 March 2025: £12,437m) of the non-current investments
relates to amounts owed by the parent and ultimate parent company (see note
13)
(
)
Group statement of changes in equity
Share Capital Share Premium Other Reserves Retained Earnings Total Equity
£m £m £m £m £m
At 1 April 2025 2,172 8,000 1,535 13,724 25,431
Profit for the period - - - 981 981
Other comprehensive income (loss) before tax - - (14) (477) (491)
Tax on other comprehensive (loss) income - - 22 122 144
Transferred to the income statement - - (112) - (112)
Total comprehensive income (loss) for the period - - (104) 626 522
Dividends to shareholders - - - (1,500) (1,500)
Share-based payments - - - 23 23
Other movements - - 1 - 1
At 30 September 2025 2,172 8,000 1,432 12,873 24,477
At 1 April 2024 2,172 8,000 1,423 12,587 24,182
Profit for the period - - - 1,137 1,137
Other comprehensive income (loss) before tax - - (500) (228) (728)
Tax on other comprehensive (loss) income - - (35) 56 21
Transferred to the income statement - - 533 - 533
Total comprehensive income (loss) for the period - - (2) 965 963
Dividends to shareholders - - - (780) (780)
Share-based payments - - - 29 29
Other movements - - - 4 4
At 30 September 2024 2,172 8,000 1,421 12,805 24,398
Group cash flow statement
Half year to 30 September
2025 2024
£m £m
Cash flow from operating activities
Profit before taxation 1,192 1,349
Share of post tax loss (profit) of associates and joint ventures 9 3
Net finance expense 279 167
Operating profit 1,480 1,519
Other non-cash charges(1) 17 58
Impairment loss on remeasurement of disposal groups 27 -
(Profit) loss on disposal of property, plant and equipment and intangible (31) (4)
assets
Depreciation and amortisation, including impairment charges 2,417 2,348
(Increase) decrease in inventories (29) 49
(Increase) decrease in trade and other receivables (78) 228
Decrease (increase) in contract assets 124 190
(Decrease) increase in trade and other payables (300) (573)
(Decrease) increase in contract liabilities (12) (48)
(Decrease) increase in other liabilities(2) (791) (824)
(Decrease) increase in provisions (31) (30)
Cash generated from operations 2,793 2,913
Income taxes refunded (paid) (28) 72
Net cash inflow from operating activities 2,765 2,985
Cash flow from investing activities
Interest received 54 64
Dividends received from joint ventures, associates and investments 1 -
Proceeds on disposal of businesses 36 25
Net outflow on non-current amounts owed by ultimate parent company (606) (609)
Proceeds on disposal of current financial assets(3) 6,639 7,441
Purchases of current financial assets(3) (5,640) (7,458)
Proceeds from investment in preference shares in joint venture 19 -
Proceeds on disposal of property, plant and equipment and intangible assets 34 5
Purchases of property, plant and equipment and intangible assets(4) (2,590) (2,463)
Decrease (increase) in amounts owed by joint ventures 46 84
Settlement of minimum guarantee liability with sports joint venture (118) (103)
Net cash (outflow) inflow from investing activities (2,125) 3,014
Cash flow from financing activities
Interest paid (441) (476)
Repayment of borrowings(5) (874) (1,346)
Proceeds from bank loans and bonds 1,056 1,833
Payment of lease liabilities (380) (383)
Cash flows from collateral received (paid) 281 301
Increase (decrease) in amounts owed to joint ventures 16 (1)
Net cash outflow from financing activities (342) (72)
Net Increase (decrease) in cash and cash equivalents 298 (101)
Opening cash and cash equivalents 207 351
Net decrease in cash and cash equivalents 298 (101)
Effect of exchange rate changes (7) (5)
Closing cash and cash equivalents(6) 498 245
(1 ) FY26 non-cash items include £(1)m of fair value (gain) loss (H1 FY25:
£44m) on A and C preference shares held in the sports JV and an impairment
loss of £23m (H1 FY25: Nil) in respect of Group's equity interest in the
sports JV.
(2 ) Includes pension deficit payments of £789m (H1 FY25: £791m).
(3) ( ) Primarily consists of investment in and redemption of amounts held in
liquidity funds.
(4 ) Property, plant and equipment, engineering stores and software
additions of £2,442m (H1 FY25: £2,269m), capital accruals movements of £83m
(H1 FY25: £166m) and spectrum payment of £1m (H1 FY25 : £nil). Purchases of
property, plant and equipment is presented net of cash inflows from government
grants of £64m (H1 FY25: £28m).
(5 ) Repayment of borrowings includes the impact of hedging.
(6 ) Net of bank overdrafts of £7m (H1 FY25: £58m). Cash and cash
equivalents include £152m (H1 FY25: £nil) of cash held for sale as detailed
in note 11. Assets and liabilities held for sale.
(
)
Notes to the condensed consolidated financial statements
1. Basis of preparation and accounting policies
Basis of preparation
These unaudited condensed consolidated financial statements (the "financial
statements") comprise the financial results of British Telecommunications plc
for the half years to 30 September 2025 and 2024 together with the balance
sheet at 31 March 2025. The financial statements for the half year to 30
September 2025 have been reviewed by the auditors and their review opinion is
on page 29. The financial statements have been prepared in accordance with the
Disclosure Guidance and Transparency Rules sourcebook (DTR) of the Financial
Conduct Authority and with UK-adopted IAS 34 'Interim Financial Reporting'.
The financial statements should be read in conjunction with the Annual Report
2025 which was prepared in accordance with UK-adopted International Financial
Reporting Standards (IFRS).
Management have produced forecasts which confirm the group has adequate
resources to continue in operation for a period of at least twelve months from
the date of approval of this report, notwithstanding the net current
liabilities position of £1,781m at 30 September 2025 (£1,828m net current
liabilities at 31 March 2025). Consequently, the directors consider it
appropriate to adopt the going concern basis of accounting in preparing the
condensed consolidated financial statements for the half year to 30 September
2025. When reaching this conclusion, the directors took into account:
• The group's overall financial position (including trading during
the year and ability to repay term debt as it matures without recourse to
refinancing); and
• Exposure to our principal risks and uncertainties; and
• The financial effect of a severe but plausible downside scenario
At 30 September 2025, the group had cash and cash equivalents of £498m (net
of bank overdrafts) and current asset investments of £1,631m. The group also
had access to committed borrowing facilities of £2.1bn, which matures no
earlier than January 2030 with the option to extend for two further years.
The information for the year ended 31 March 2025 does not constitute the
group's statutory accounts as defined in section 434 of the Companies Act
2006. A copy of the statutory accounts for that year has been delivered to the
Registrar of Companies. The auditor has reported on those accounts; their
report (i) was unqualified, (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without qualifying their
report and (iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006 in respect of the accounts for the year to 31 March
2025.
A reference to a year expressed as FY26 is to the financial year to 31 March
2026.
Accounting policies changes and restatements
Other than as stated below, the financial statements have been prepared in
accordance with the accounting policies as set out in the financial statements
for the year to 31 March 2025 and have been prepared under the historical cost
convention as modified by the revaluation of financial assets and liabilities
(including derivative financial instruments) at fair value.
Formation of the International segment and re-presentation of prior year
comparatives
The International CFU was separated from Business forming a new CFU, effective
from 1 July 2025. In line with the requirements of IFRS 8 Operating Segments,
we have re-presented H1 FY25 comparatives to reflect the separate units.
In addition, two re-presentations have been made to segmental revenue
reporting, consistent with the information now provided to the BT Group
Executive Committee, which is the key management committee and represents the
'chief operating decision maker' (CODM). The re-presentations reflect
Openreach pass-through services previously reported in Business, and a
reclassification of an EE and BT Wholesale trading relationship as revenue
from costs.
The Group has revised its disaggregation of external revenue to better reflect
the internal reporting provided to the Chief Operating Decision Maker (CODM).
Revenue previously reported under "Equipment and Other Services" has been
split into separate categories: "Equipment" and "Other Services."
Additionally, lease revenue is now disclosed within our disaggregation of
revenue. Segmental revenue includes internal revenue to more accurately
reflect segment performance.
Note 15 and the Additional Information on page 30 present bridges between
financial information for the half year to 30 September 2024 as published on
18 November 2024, and the comparatives presented in this release.
Re-presentation of goodwill and other intangible assets
From H1 FY26, we have disaggregated "Intangible Assets" into "Goodwill" and
"Other Intangible Assets", presenting them as separate line items and in
distinct disclosure notes. This updated presentation aims to provide users of
the financial statements with a clearer view of our financial position.
New and amended accounting standards effective during the year
Lack of Exchangeability (Amendments to IAS 21) is the only amended standard
effective during the year, which did not have a material impact on the
financial statements of the group.
IFRS Interpretations Committee agenda decisions
The IFRS Interpretations Committee (IFRIC) periodically issues agenda
decisions which explain and clarify how to apply the principles and
requirements of IFRS standards. Agenda decisions are authoritative and may
require the group to revise accounting policies or practice to align with the
interpretations set out in the decision.
We regularly review IFRIC updates and assess the impact of agenda decisions.
No agenda decisions finalised in the half year to 30 September 2025 have been
assessed as having a significant impact on the group.
New and amended accounting standards that have been issued but are not yet
effective
The IASB has issued IFRS 18 Presentation and Disclosure in Financial
Statements which replaces IAS 1 Presentation of Financial Statements. BT is
evaluating the impact of this new standard on its financial statements. It
will be effective for BT for the first time for FY28.
We are currently assessing the impact of the standards below, but they are not
expected to have a material impact on the consolidated financial statements:
• Classification and Measurement of Financial Instruments
(Amendments to IFRS 9 and IFRS 7)
• Contracts referencing Nature-dependent Electricity (Amendments to
IFRS 9 and IFRS 7)
• Annual Improvements to IFRS Accounting Standards - Volume 11
• Subsidiaries without Public Accountability: Disclosures (IFRS 19)
Effective dates will be subject to the UK endorsement process. We have not
adopted any other standard, amendment or interpretation that has been issued
but is not yet effective.
IFRS S1 General Requirements for Disclosure of Sustainability-related
Financial Information, and IFRS S2 Climate-related Disclosures have been
issued but not yet endorsed by the UK authorities. We will continue to monitor
new disclosure requirements and update our disclosures as part of the TCFD
reporting where relevant.
2. Operating results - by customer-facing unit
Half year to 30 September 2025
Consumer Business International Openreach Other Total
£m £m £m £m £m £m
Segment revenue 4,684 2,589 1,110 3,131 6 11,520
Internal revenue (20) (108) - (1,586) - (1,714)
Adjusted(1) external revenue 4,664 2,481 1,110 1,545 6 9,806
Adjusted EBITDA(1,2) 1,274 647 66 2,148 (10) 4,125
Depreciation and amortisation (849) (372) (102) (1,053) (41) (2,417)
Adjusted(1) operating profit (loss) 425 275 (36) 1,095 (51) 1,708
Specific items (note 5) (228)
Operating profit 1,480
Half year to 30 September 2024 (re-presented(3))
Segment revenue 4,836 2,644 1,220 3,118 5 11,823
Internal revenue (20) (99) - (1,566) - (1,685)
Adjusted(1) external revenue 4,816 2,545 1,220 1,552 5 10,138
Adjusted EBITDA(1,2) 1,330 656 91 2,059 (3) 4,133
Depreciation and amortisation (873) (360) (117) (974) (24) (2,348)
Adjusted(1) operating profit (loss) 457 296 (26) 1,085 (27) 1,785
Specific items (note 5) (266)
Operating profit 1,519
(1 ) See Glossary on page 7.
(2 ) For the reconciliation of adjusted EBITDA, see Additional Information
on page 30.
(3 ) H1 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 15 on page 25 and the Additional
Information on page 30 present bridges between financial information for the
half year to 30 September 2024 as published on 18 November 2024, and the
comparatives presented in this release.
( )
( )
(
)
3. Operating results - disaggregation of revenue
Half year to 30 September 2025
Consumer Business International Openreach Other Internal Revenue Total
£m £m £m £m £m £m £m
ICT and managed networks - 558 397 - - (5) 950
Fixed access subscriptions 2,042 1,021 500 - - (15) 3,548
Mobile subscriptions 1,774 419 15 - - (22) 2,186
Other services 9 371 48 107 6 (138) 403
Equipment revenue 751 216 145 - - (1) 1,111
Revenue from contracts with customers 4,576 2,585 1,105 107 6 (181) 8,198
Lease revenue(2) 108 4 5 3,024 - (1,533) 1,608
Total adjusted(1) revenue 4,684 2,589 1,110 3,131 6 (1,714) 9,806
Specific items (note 5) 4
Total revenue(3) 9,810
Half year to 30 September 2024 (re-presented(4))
ICT and managed networks - 575 440 - - (1) 1,014
Fixed access subscriptions 2,125 1,055 570 - - (21) 3,729
Mobile subscriptions 1,788 426 16 - - (23) 2,207
Other services - 343 50 76 5 (103) 371
Equipment revenue 847 241 139 - - (1) 1,226
Revenue from contracts with customers 4,760 2,640 1,215 76 5 (149) 8,547
Lease revenue(2) 76 4 5 3,042 - (1,536) 1,591
Total adjusted(1) revenue 4,836 2,644 1,220 3,118 5 (1,685) 10,138
Specific items (note 5) (21)
Total revenue(3) 10,117
(1 ) See Glossary on page 7.
(2 ) Lease revenue includes income from Openreach's fixed access
subscription services.
(3 ) We have further disaggregated the revenue presented here to derive the
UK adjusted service revenue of £7,726m (H1 FY25: £7,827m). Please refer to
our adjusted UK service revenue reconciliation in Additional Information on
page 30. Adjusted UK service revenue includes some portion of equipment
revenue where that equipment is sold as part of a managed services contract,
or where that equipment cannot be practicably separated from the underlying
service.( )
(4 ) H1 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 units. Note 15 presents a bridge between
financial information for the half year to 30 September 2024 as published on
18 November 2024, and the comparatives presented in this release.
( )
4. Operating costs
Half year to 30 September
2025 2024
£m £m
Operating costs by nature
Wages and salaries 1,903 2,013
Social security costs 239 216
Other pension costs 159 171
Share-based payment expense 23 29
Total staff costs 2,324 2,429
Capitalised direct labour (696) (710)
Net staff costs 1,628 1,719
Indirect labour costs 663 653
Capitalised indirect labour (388) (388)
Net indirect labour costs 275 265
Net labour costs 1,903 1,984
Product costs 1,526 1,551
External sales commissions 231 229
Payments to telecommunications operators 488 564
Property and energy costs 632 637
Network operating and IT costs 540 534
Provision and installation 172 170
Marketing and sales 120 168
Net impairment losses on trade receivables and contract assets 80 75
Other operating costs 144 212
Other operating income (155) (119)
Depreciation and amortisation, including impairment charges 2,417 2,348
Total operating costs before specific items 8,098 8,353
Specific items (note 5) 232 245
Total operating costs 8,330 8,598
Depreciation and amortisation, which includes impairment charges, is analysed
as follows:
Half year to 30 September
2025 2024
£m £m
Depreciation and amortisation before impairment charges
Intangible assets 642 608
Property, plant and equipment 1,461 1,410
Right-of-use assets 305 324
Impairment charges
Intangible assets 4 -
Property, plant and equipment 2 8
Right-of-use assets 3 (2)
Total depreciation and amortisation before specific items 2,417 2,348
Total operating costs 2,417 2,348
5. Specific items
Our income statement and segmental analysis separately identify trading
results on an adjusted basis, being before specific items. The directors
believe that presentation of the group's results in this way is relevant to an
understanding of the group's financial performance as specific items are those
that in management's judgement need to be disclosed by virtue of their size,
nature or incidence.
This presentation is consistent with the way that financial performance is
measured by management and reported to the BT Group Board and the Executive
Committee and assists in providing an additional analysis of our reported
trading results. Specific items may not be comparable to similarly titled
measures used by other companies. In determining whether an event or
transaction is specific, management considers quantitative as well as
qualitative factors.
Examples of charges or credits meeting the above definition and which have
been presented as specific items in the current and/or prior years include
significant business restructuring programmes such as the current group-wide
cost transformation and modernisation programme, disposals of businesses and
investments, impairment loss on remeasurement of held for sale items, charges
or credits relating to retrospective regulatory matters, increases in
litigation provisions, property rationalisation programmes, significant out of
period contract settlements, net interest on our pension obligation, and the
impact of remeasuring deferred tax balances. In the event that items meet the
criteria, which are applied consistently from year to year, they are treated
as specific items. Any releases to provisions originally booked as a specific
item are also classified as specific. Conversely, when a reversal occurs in
relation to a prior year item not classified as specific, the reversal is not
classified as specific in the current year.
Movements relating to the sports joint venture (Sports JV) with Warner Bros.
Discovery (WBD), such as fair value gains or losses on the A and C preference
shares or impairment charges on the equity-accounted investment are classified
as specific. Refer to note 10 for further details.
Half year to 30 September
2025 2024
£m £m
Specific revenue
Retrospective regulatory matters (4) 21
Specific revenue (4) 21
Specific operating costs
Restructuring charges 134 187
- Previous Public Commitment (FY25) - 187
- Portfolio simplification, and product and platform modernisation 85 -
- Openreach transformation following peak FTTP build 49 -
Sports JV-related items 22 44
Divestment-related items 19 3
Retrospective regulatory matters - 11
Increase in litigation provisions 30 -
Impairment loss on remeasurement of held for sale items 27 -
Specific operating costs before depreciation and amortisation 232 245
Specific operating costs 232 245
Specific operating loss 228 266
Interest expense on retirement benefit obligation 96 99
Net specific items charge before tax 324 365
Tax charge (credit) on specific items (65) (77)
Net specific items charge after tax 259 288
Retrospective regulatory matters
We recognised a credit £(4)m (H1 FY25: charge of £21m) within revenue in
relation to historical regulatory matters and £nil (H1 FY25: £11m charge)
impact was recognised within operating costs. These items represent movements
in provisions relating to various matters.
Restructuring charges
During the half year, we incurred charges of £134m (H1 FY25: £187m) relating
to our group-wide cost transformation and modernisation programme. Of this
amount, the portfolio simplification, and product and platform modernisation
initiatives, accounted for £85m. Further charges of £49m were associated
with the Openreach transformation following the peak FTTP build programme. The
majority of these expenses comprise leaver costs and consultancy fees
attributable to the programmes. As previously disclosed, in May 2024 a new
transformation programme was announced which targeted £3bn gross annualised
cost savings, with a total cost to achieve of £1bn which will run until the
end of FY29. The benefits and costs of the final FY25 year of the previous May
2020 programme were absorbed into the new targets. As that programme has now
finished, from FY26 we are disclosing each transformation programme
separately.
Net cash outflows from restructuring activities amounted to £190m during the
half year (H1 FY25: £198m).
In H1 FY26, the May 2024 programme delivered an estimated £247m in gross
annualised cost savings at a cost to achieve of £134m.
Since the programme was announced we have achieved gross annualised cost
savings of £1.2bn at a cost to achieve of £581m. The total expected cash
costs to achieve until FY29 is £1bn, of this we have incurred £0.6bn.
We do not consider the estimated restructuring costs to achieve of £1bn
referenced here to constitute a sufficiently-detailed formal announcement of a
restructuring programme such that would trigger a provision under IAS 37.
Costs are provided for when the IAS 37 recognition criteria are met.
Sports JV-related items
We have recorded a net fair value gain of £1m (H1 FY25: £44m loss) on the A
and C preference shares in the Sports JV and an impairment loss of £23m on
ordinary equity interest in the Sports JV. Refer to note 10 for further
details.
Divestment-related items
We recognised a £19m charge (H1 FY25: £3m charge) relating to costs
associated with ongoing divestment activities as we progress towards becoming
fully UK focused.
Increase in litigation provisions
We have increased our litigation provision by £30m. BT is currently engaged
in litigation activity as the defendant. This has been recognised as specific
due to the size and incidence of this adjustment.
Impairment loss on remeasurement of held for sale items
We recognised an impairment charge of £27m for the remeasurement of held for
sale related items. Assets classified as held for sale under IFRS 5 are
measured at the lower of their carrying amount and fair value less costs to
sell, resulting in an impairment loss.
Interest expense on retirement benefit obligation
We incurred £96m (H1 FY25: £99m) of interest costs in relation to our
defined benefit pension obligations.
Tax on specific items
A tax credit of £65m was recognised in relation to specific items (H1 FY25:
£77m).
6. Pensions
30 September 2025 31 March 2025
£bn £bn
IAS 19 liabilities - BTPS (35.3) (35.7)
Assets - BTPS 31.5 31.7
Other schemes (0.1) (0.1)
Total IAS 19 deficit, gross of tax(1) (3.9) (4.1)
Total IAS 19 deficit, net of tax (2.9) (3.2)
Discount rate (nominal) 5.70 % 5.75 %
Future inflation - average increase in RPI (p.a.) 2.95 % 3.10 %
Future inflation - average increase in CPI (p.a.) 2.50 % 2.60 %
(1 ) Of which £(4.0)bn relates to schemes in deficit (31 March 2025:
£(4.2)bn) and £0.1bn relates to schemes in surplus (31 March 2025: £0.1bn).
The IAS 19 deficit decreased to £3.9bn at 30 September 2025 from £4.1bn at
31 March 2025 due to scheduled contributions. This was offset by a decrease in
credit spreads and higher real interest rates since year-end. Changes in
credit spreads and real interest rates impact the IAS 19 position, but have
limited impact on the funding position.
The 2023 BTPS funding valuation included a future funding commitment for BT to
provide additional deficit contributions of £150m - £300m p.a. 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.
7. Financial instruments and risk management
Fair value of financial assets and liabilities measured at amortised cost
At 30 September 2025, the fair value of listed bonds was £18,877m (31 March
2025: £18,132m) and the carrying value was £19,083m (31 March 2025:
£18,568m). The increase was primarily attributable to £1,056m of newly
issued bonds, partially offset by £807m of bond redemptions and repayments.
The fair value of the following financial assets and liabilities approximate
to their carrying amount:
• Cash and cash equivalents
• Lease liabilities
• Trade and other receivables
• Trade and other payables
• Investments held at amortised cost
• Other short-term borrowings
• Contract assets
• Contract liabilities
The group's activities expose it to a variety of financial risks: market risk
(including interest rate risk, foreign exchange risk and energy price risk);
credit risk; and liquidity risk. There have been no changes to the risk
management policies which cover these risks since 31 March 2025.
Current trade and other payables balance of £5,496m includes (31 March 2025:
£5,873m):
• £189m (31 March 2025: £nil) of trade payables in a supply chain
financing programme used with a limited number of suppliers to extend short
payment terms to a more typical payment term.
• £234m (31 March 2025: £223m) of trade payables in a separate
supply chain financing programme that allows suppliers the opportunity to
receive funding earlier than the invoice due date. Financial institutions are
used to support this programme but we continue to recognise the underlying
payables as we continue to cash settle the supplier invoices in accordance
with their terms.
Fair value estimation
Fair values of financial instruments are analysed by three levels of valuation
methodology which are:
1. Level 1 - uses quoted prices in active markets for identical assets
or liabilities.
2. Level 2 - uses inputs for the asset or liability other than quoted
prices that are observable either directly or indirectly.
3. Level 3 - uses inputs for the asset or liability that are not based
on observable market data, such as internal models or other valuation methods.
Level 2 balances are the fair values of the group's outstanding derivative
financial assets and liabilities which were estimated using discounted cash
flow models and market rates of interest and foreign exchange at the balance
sheet date.
Level 3 balances comprise the following financial instruments classified as
fair value through profit and loss and fair value through other comprehensive
income:
• A and C preference shares in the Sports JV, see note 10 for more
details.
• Investments in a number of private companies. If specific market
data is not available, these investments are held at cost, adjusted as
necessary for impairments, which approximates to fair value.
• Derivative energy contracts, estimated using discounted cash flow
models and the latest forward energy curves at the balance sheet date.
Level 1 Level 2 Level 3 Total held at fair value
30 September 2025 £m £m £m £m
Preference shares in joint venture
Fair value through profit and loss - - 377 377
Investments
Fair value through other comprehensive income - - 20 20
Fair value through profit and loss - - - -
Derivative assets
Designated in a cash flow hedge - 936 6 942
Designated in a fair value hedge - 24 - 24
Fair value through profit and loss - 74 - 74
Total assets - 1,034 403 1,437
Derivative liabilities
Designated in a cash flow hedge - 278 65 343
Designated in a fair value hedge - 17 - 17
Fair value through profit and loss - 45 11 56
Total liabilities - 340 76 416
( )
( )
Level 1 Level 2 Level 3 Total held at fair value
31 March 2025 £m £m £m £m
Preference shares in joint venture
Fair value through profit and loss - - 395 395
Investments
Fair value through other comprehensive income - - 17 17
Fair value through profit and loss - - - -
Derivative assets
Designated in a cash flow hedge - 943 4 947
Designated in a fair value hedge - 1 - 1
Fair value through profit and loss - 86 - 86
Total assets - 1,030 416 1,446
Derivative liabilities
Designated in a cash flow hedge - 356 64 420
Designated in a fair value hedge - - - -
Fair value through profit and loss - 66 11 77
Total liabilities - 422 75 497
Net loss of £40m and net gain of £26m have been recognised in the income
statement and other comprehensive income respectively in respect of fair value
movements on level 3 instruments during the year ended 30 September 2025. Of
the £40m loss recognised in the income statement £22m loss is in respect of
recycling from cash flow hedge reserve. There were no significant changes to
the valuation methods or transfers between the levels of fair value hierarchy
during the period.
8. Financial commitments
Financial commitments as at 30 September 2025 include capital commitments of
£1,049m (31 March 2025: £985m).
9. Contingent liabilities and legal proceedings
In the ordinary course of business, we are periodically notified of actual or
threatened litigation, and regulatory and compliance matters and
investigations. We have disclosed below a number of such matters including any
matters where we believe a material adverse impact on the operations or
financial condition of the group is possible and the likelihood of a material
outflow of resources is more than remote.
Where the outflow of resources is considered probable, and a reasonable
estimate can be made of the amount of that obligation, a provision is
recognised for these amounts. Where an outflow is not probable but is
possible, or a reasonable estimate of the obligation cannot be made, a
contingent liability exists.
In respect of each of the claims below, the nature and progression of such
proceedings and investigations can make it difficult to predict the impact
they will have on the group. There are many reasons why we cannot make these
assessments with certainty, including, among others, that they are in early
stages, no damages or remedies have been specified, and/or the often slow pace
of litigation.
Class action claim - combined mobile and handset services
In November 2023, Justin Gutmann, represented by law firm Charles Lyndon
applied to the Competition Appeal Tribunal to bring a proposed class action
claim for damages estimated at £1.1bn (inclusive of simple interest) on
behalf of customers who purchased combined handset and airtime contracts who
are outside their minimum contract terms but who continue to pay the same
price as during their minimum contract terms. The claim alleges this approach
was an anti-competitive abuse of a dominant position. Similar claims have also
been brought against Vodafone, Three and O2 with the total damages claimed
£3.285bn (inclusive of simple interest). Class actions must be certified by
the Competition Appeal Tribunal at a Collective Proceedings Order (CPO)
hearing before proceeding to a substantive trial. A certification hearing took
place in early April 2025 at which BT and the other proposed defendants
contested certifications and applied to limit the time period of the claim. If
the class action is certified the substantive trial will not conclude during
FY26. BT intends to defend itself vigorously. At the reporting date we are not
aware of any evidence to indicate that a present obligation exists such that
any amount should be provided for.
Italian business
Milan Public Prosecutor prosecutions: In FY20 proceedings were initiated
against BT Italia for certain potential offences, namely the charge of having
adopted, from 2011 to 2016, an inadequate management and control organisation
model for the purposes of Articles 5 and 25 of Legislative Decree 231/2001. BT
Italia disputed this and maintained in a defence brief filed in April 2019
that: (a) BT Italia did not gain any interest or benefit from the conduct in
question; and (b) in any event, it had a sufficient organisational, management
and audit model that was circumvented/overridden by individuals acting in
their own self-interest. The trial commenced on 26 January 2021. On 23 April
2021, the Court allowed some parties to be joined to the criminal proceedings
as civil parties ('parte civile') - a procedural feature of the Italian
criminal law system. These claims were directed at certain individual
defendants (which include former BT/ BT Italia employees). Those parties
successfully joined BT Italia as a respondent to their civil claims
('responsabile civile') on the basis that it is vicariously responsible for
the individuals' wrongdoing.
The first instance phase of the trial has now concluded with the Court handing
down its decision on 25 January 2024. The Court convicted certain individuals
(including certain former BT Italia employees) for manipulation of BT Italia's
financial statements for the financial year ending 31 March 2016 and for fraud
against an Italian company, Sed Multitel S.r.l. The Court dismissed all
charges that had been brought against BT Italia but ordered that BT Italia
indemnify certain individual minority shareholders in the company and Sed
Multitel for their losses. The Court has not quantified the indemnification
amount, such that the indemnified parties must now seek to recover these
amounts from BT Italia by agreement or separate civil proceedings. The quantum
of those claims, if they are pursued successfully, is not anticipated to be
material.
Accounting misstatement claims: a law firm acting on behalf of a group of
investors has made claims under s.90A of the Financial Services & Markets
Act 2000, alleging that untrue or misleading statements were made in relation
to the historical irregular accounting practices in BT's Italian business
(which have been the subject of previous disclosures). The claim does not
specify a value, but we anticipate the claimants may seek material damages.
The matter is in the early stages. As mentioned in our earlier reports, the
accounting issues in Italy have previously been the subject of class actions
in the US that were dismissed by the US courts.
Class action claim - landline only services
In January 2021, Justin Le Patourel, represented by law firm Mishcon de Reya
applied to the Competition Appeal Tribunal to bring a proposed class action
claim for damages they estimated at £608m (inclusive of compound interest) or
£589m (inclusive of simple interest) alleging anti-competitive behaviour
through excessive pricing by BT to customers with certain residential landline
services, so-called "stand-alone fixed voice services". Following
certification of the claim to proceed to trial as an opt-out claim, Justin Le
Patourel amended his claim seeking £1,307m (inclusive of compound interest)
or £1,278m (inclusive of simple interest). A hearing took place between
January and March 2024. In December 2024, the Competition Appeal Tribunal
dismissed the claim, finding that there was no abuse of a dominance position
because BT's prices were not unfair. In January 2025, Justin Le Patourel
applied to the Competition Appeal Tribunal for permission to appeal the
judgment. In February 2025 the Competition Appeal Tribunal refused permission
to appeal. In March 2025 Justin Le Patourel applied to the Court of Appeal for
permission to appeal the judgment. In August 2025, the Court of Appeal refused
permission to appeal the Competition Appeal Tribunals judgement. We now
consider this matter to be brought to a resolution and no longer recognise a
contingent liability in relation to this class action claim.
Phones 4U
Since 2015 the administrators of Phones 4U Limited have made allegations that
EE and other mobile network operators colluded to procure Phones 4U's
insolvency. Legal proceedings for an unquantified amount were issued in
December 2018 by the administrators. The trial on the question of
liability/breach ran from May to July 2022. In November 2023 the High Court
dismissed Phones 4U's claim in its entirety. Phones 4U subsequently appealed
that judgment to the Court of Appeal and a hearing was held in May 2025 where
Phone4U's appeal was rejected. We now consider this matter to be brought to a
resolution and no longer recognise a contingent liability in relation to this
claim.
10. Joint ventures and associates
30 September 2025 31 March 2025
£m £m
Interest in joint ventures 218 240
Interest in associates 6 12
Closing balance 224 252
Share of post tax loss of associates and joint ventures included in the income
statement of £9m (H1 FY25: £3m loss) includes £9m loss (H1 FY25: £4m loss)
relating to our sports joint venture (Sports JV) with Warner Bros. Discovery
(WBD) and net £nil profit (H1 FY25: £1m profit) relating to our other
associates and joint ventures. Share of post tax other comprehensive income in
associates and joint ventures amounted to £11m (H1 FY25: £4m loss), solely
relating to the Sports JV, resulting in a net £2m share of total
comprehensive profit for the period. The Sports JV is the only material
equity-accounted investment held by the group, see below for further details.
Sports JV
In FY23, the group formed a sports joint venture with WBD, known externally as
TNT Sports, which combined BT Sport and WBD's Eurosport UK business. As part
of the transaction, the group's wholly owned subsidiary, British
Telecommunications plc (BT plc or BT) and WBD each contributed, sub-licensed
or delivered the benefit of their respective sports rights and distribution
businesses for the UK & Ireland to the Sports JV. Both parties each hold a
50% interest and equal voting rights in the Sports JV.
WBD have the option to acquire BT plc's 50% interest in the Sports JV at
specified points during the first four years of the Sports JV (Call Option)
from FY23. The price payable under the Call Option will be 50% of the fair
market value of the Sports JV to be determined at the time of the exercise,
plus any unpaid fixed consideration and remaining earn-out as described below.
If the Call Option is not exercised, BT plc will have the ability to exit its
shareholding in the Sports JV either through a sale or IPO after the initial
four-year period.
The group holds both ordinary equity shares and preference shares in the
Sports JV entity, details on these are provided below. In addition, the Group
has several other instruments associated with our interest in the Sports JV
including, a net loan payable due to the Sports JV (£27m) and a minimum
guarantee liability (£173m).
Ordinary equity shares
Our retained ordinary equity interest in the Sports JV is held under the
equity method of accounting, consistent with our accounting policy on joint
ventures and associates.
2025
£m
Carrying amount at 1 April 238
Share of total comprehensive profit for the period 2
Dividends during the period (1)
Impairment loss for the period (23)
Carrying amount at 30 September 216
An impairment loss was recognised as at 30 September 2025 in respect of the
Group's equity interest in the Sports JV. The impairment arose following a
fair value assessment which indicated that the recoverable amount of the
investment was lower than its carrying amount. The impairment reflects revised
expectations of the joint venture's future underlying performance and market
conditions, driving a reduction in the fair value. Changes in key assumptions
relating to future performance and market conditions, could result in further
impairment losses or reversals in future periods. In particular, the outcome
of the renewal of TNT Sports' UEFA men's club competition rights, which were
released for tender in October 2025, could have a significant impact on the
future prospects and long-term viability of the business, and therefore a
material impact on the value of BT's equity shareholding.
Preference shares
In addition to BT's ordinary shareholding, BT held the following investments
in preference shares in the Sports JV that have not been included within the
equity-accounted interest above.
30 September 2025 31 March 2025
£m £m
Investment in A preference shares 220 242
Investment in C preference shares 157 153
Total 377 395
A net £(18)m movement has been recorded in the group's preference share
investments largely driven by a £19m earn-out payment received from the
Sports JV and recorded as a repayment of our investment in A preference
shares; and a net £1m fair value gain, see below for further details.
• A preference shares - a £3m fair value loss has been recognised through
specific items (see note 5), primarily driven by a reduction in EBITDA,
leading to lower cash available for distribution under BT's earn-out
entitlement.
• C preference shares - BT's return on the shares is driven by changes in
the Sports JV's sports rights portfolio which in turn is dependent on changes
in the wider sports rights market and the Sports JV's financial performance
and are therefore held as a financial asset at FVTPL under IFRS 9. A £4m fair
value gain has been recognised through specific items (see note 5) largely
driven by the effect of discounting.
11. Divestment and assets and liabilities classified as held for sale
We classify non-current assets or a group of assets and associated
liabilities, together forming a disposal group, as 'held for sale' when their
carrying amount will be recovered principally through disposal rather than
continuing use and the sale is highly probable. A sale is highly probable when
management is committed to a plan to sell and completion is expected within
one year. We measure non-current assets or disposal groups classified as held
for sale at the lower of carrying amount and fair value less costs of
disposal. Intangible assets, property, plant and equipment and right-of-use
assets classified as held for sale are not depreciated or amortised.
During FY25, the group announced its intention to fully focus on UK
connectivity and initiated a programme to explore options to optimise its
non-core or global business. At 31 March 2025, management was committed to a
plan to sell five separate businesses within our non-core or global business.
The sales were considered to be highly probable and expected to complete
within one year. Accordingly, the associated assets and liabilities were
presented as held for sale at 31 March 2025.
One of these disposal groups, BT Communications Ireland Ltd, was disposed of
during the period with no gain or loss on disposal recognised. The remaining
four disposal groups continue to be classified as held for sale at 30
September 2025.
During the period, we entered into two sale agreements for the remaining
disposal groups classified as held for sale. The most significant of which was
for the disposal of BT Radianz to Transaction Network Services which was
entered into in September 2025. The disposals are expected to complete in
FY26, subject to customary closing conditions which include regulatory
approvals. During the fiscal year 2024/25 the Radianz unit generated revenues
of approx. £142 million.
Impairment on remeasurement of disposal groups held for sale
In accordance with IFRS 5, disposal groups are measured at the lower of their
carrying amount and fair value less costs to sell. During the period, a
remeasurement of certain disposal groups resulted in the recognition of an
impairment loss of £27 million (H1 FY25: £nil). This has been presented as a
specific item in the income statement (see Note 5). The impairment has been
allocated to reduce the carrying values of intangible assets, property, plant
and equipment, and right-of-use assets within the affected disposal groups.
The disposal groups held for sale comprised the following assets and
liabilities:
30 September 2025 31 March 2025
£m £m
Assets
Intangible assets 93 94
Property, plant and equipment 20 40
Right-of-use assets 25 33
Trade and other receivables 48 78
Cash and cash equivalents(1) 152 -
Assets held for sale 338 245
Liabilities
Trade and other payables 62 100
Current lease liabilities 68 81
Current tax liability 2 4
Provisions 3 3
Liabilities held for sale 135 188
(1 ) Included within cash and cash equivalents of £152 million is the
Group's contribution to Retelit S.p.A. in connection with the disposal of its
domestic operations in Italy. Under the terms of the sale agreement, Retelit
S.p.A. will acquire the Italian business in exchange for a contribution from
BT, determined with reference to the agreed enterprise value.
12. Goodwill
An impairment review has been carried out across all the cash-generating units
(CGUs) to which goodwill is allocated, in accordance with IAS 36 Impairment of
Assets. As at 30 September 2025, no indicators of impairment have been
identified that would necessitate a full impairment test (H1 FY25: nil).
13. Related party transactions
British Telecommunications plc and certain of its subsidiaries act as a funder
and deposit taker for cash-related transactions for both its parent (BT Group
Investments Limited) and ultimate parent company (BT Group plc). The loan
arrangements described below with these companies reflect this. Cash
transactions normally arise where the parent and ultimate parent company are
required to meet their external payment obligations or receive amounts from
third parties. These principally relate to the payment of dividends, the
buyback of shares and the exercise of share options. Transactions between the
ultimate parent company, the parent company and the group are settled on both
a cash and non-cash basis through these loan accounts depending on the nature
of the transaction.
A dividend of £1,500m was declared and settled with the parent company (FY25:
£780m).
A summary of the balances with the parent and ultimate parent companies and
the finance income or expense arising in respect of these balances is shown
below:
30 September 2025 31 March 2025
Asset (liability) Finance income (expense) Asset (liability) Finance income (expense)
Notes £m £m £m £m
Amounts owed by (to) parent company
Non-current assets investments 7 11,542 323 11,917 724
Amounts owed by (to) ultimate parent company
Non-current assets investments 7 407 7 521 23
Trade and other receivables 11 - 10 -
Trade and other payables (86) - (12) -
Finance income on non-current assets investments decreased mainly due to
changes in market rates.
British Telecommunications plc related parties include joint ventures,
associates, investments and key management personnel.
Key management personnel comprise Executive and Non-Executive Directors and
members of the BT Group plc Executive Committee.
Amounts paid to the group's retirement benefit plans are set out in note 6.
Associates and joint ventures related parties include the Sports JV with
Warner Bros (see note 10). Sales of services to the Sports JV during H1 FY26
were £2m (31 March 2025: £9m) and purchases from the Sports JV were £160m
(31 March 2025: £305m) excluding £118m (31 March 2025: £187m) additional
payments made to settle the minimum guarantee liability. The amount receivable
from the Sports JV as at 30 September 2025 was £nil (31 March 2025: £nil)
and the amount payable to the Sports JV was £71m (31 March 2025: £97m).
As part of the FY23 BT Sport transaction, the group has committed to providing
the Sports JV with a sterling Revolving Credit Facility (RCF), up to a maximum
for £200m, (31 March 2025: £200m) for short-term liquidity required by the
Sports JV to fund its working capital and commitments to sports rights
holders. Amounts drawn down by the Sports JV under the RCF accrue interest at
a market reference rate, consistent with the group's external short-term
borrowings. The outstanding balance under the RCF of £nil (31 March 2025:
£46m) is treated as a loan receivable and held at amortised cost. There is
also a loan payable to the Sports JV of £27m (31 March 2025: £10m).
The Sports JV has a foreign exchange hedging arrangement with the group to
secure Euros required to meet its commitments to certain sports rights
holders; the group has external forward contracts in place to purchase the
Euros at an agreed sterling rate in order to mitigate its exposure to exchange
risk. The group holds a £11m (31 March 2025: £36m) derivative liability in
respect of forward contracts provided to the Sports JV.
From 15 September 2025, Bharti Enterprises and its related subsidiaries are
considered related parties for the purposes of BT Group's financial reporting.
There were net purchases during the period to 30th September from Bharti
Enterprises of £0.2m.
Transactions from commercial trading arrangements with associates and joint
ventures, including the Sports JV, are shown below:
30 September 2025 31 March 2025
£m £m
Sales of services to associates and joint ventures 11 12
Purchases from associates and joint ventures 172 348
Amounts receivable from associates and joint ventures 1 2
Amounts payable to associates and joint ventures 72 99
14. Principal risks and uncertainties
We maintain robust processes for identifying, evaluating and managing our
risks. Whilst individual risks continue to evolve, overall we do not consider
that there has been a material change to any of our principal risks and
uncertainties as presented on pages 16 to 21 of the British Telecommunications
plc Annual Report 2025. We split our risk landscape into Group Risk Categories
('GRCs'). These are summarised below and have the potential to have an adverse
impact on our profit, assets, liquidity, capital resources and reputation.
Strategic
Strategy, technology and competition - To deliver value to our stakeholders
and achieve our strategy, we must carefully manage risks around economic
uncertainty, intensifying competition and rapidly changing customer and
technology trends. Equally, to stay competitive and create long-term
sustainable value, we must manage risks around designing and effectively
implementing the right strategy - and incorporating it into our business
plans.
Transformation delivery - We're speeding up our transformation to make us
simpler, more efficient and dynamic. This includes building brilliant sales
and service journeys to connect customers to future products on modern IT and
then retiring old infrastructure. This will improve customer and colleague
experience and save money. To succeed, we have to manage risks around
transformation delivery and whether we'll realise the associated benefits. Not
managing these risks could make us less efficient, damaging our financial
performance, and customer experience.
Financial
Financing - We carefully manage risks which might result in us not being able
to meet our payment commitments. They could come from not generating enough
cash, being unable to refinance existing debt or paying increased pension
scheme contributions. We also manage risks around defining and executing the
right insurance strategy.
Financial control - Our financial controls help us prevent fraud and report
accurately. If these failed we could lose money or materially misrepresent our
financial position. We might fail to apply the correct accounting principles
and treatment or pay our taxes. That could lead to financial misstatement,
fines, legal disputes and reputational damage.
Compliance
Legal and regulatory compliance - We focus on communications regulation,
competition law, anti-bribery and corruption measures, international trade
controls, financial services compliance and corporate governance
responsibilities, and managing risks in those areas. Other relevant laws and
regulations are covered in other GRCs.
Data and AI - We must follow today's global data and AI regulations while
anticipating and preparing for tomorrow's. That means actively managing risks
like privacy, data architecture, processing and retention. Our data and AI
strategy aims to deliver value and efficiency - while giving us a framework to
manage compliance risks related to data and AI regulations.
Operational
Operational resilience - We want to deliver best-in-class performance for our
customers, across our fixed and mobile networks and IT. That means being
operationally resilient and managing any risk that could disrupt our services.
Service disruptions could be caused by external events, like bad weather, as
well as poorly maintained assets. Some service disruption might depend on
suppliers' and partners' reliability - making it important to carefully manage
the risks.
Cyber security - A cyber-attack (external or internal) could disrupt customers
and the country - and compromise data. We manage security risks that might
lead to our assets or services losing their confidentiality, integrity or
availability. These include applicable regulatory or contractual obligations.
A poorly managed cyber security event might cost us money, damage our
reputation and affect our market share. The regulator might also impose fines
or penalties.
People - Our colleagues are key to delivering our ambition. Our people
strategy is to create a culture where everyone can perform and be their best.
That means us managing risks around our talent management lifecycle, skills
and capabilities, engagement, culture, wellbeing and inclusion.
Health, safety and environment - We have diverse operations and working
environments in various locations. Some of them pose risks to health, safety
and the environment (HSE). We must make sure colleagues and partners are safe
and healthy and can perform at their best while managing risk effectively.
We're committed to maintaining and continually improving the right HSE
management systems. They make sure our business is safe and compliant, while
protecting the environment and those who we might affect.
Major customer contracts - In a dynamic, highly competitive environment, we
want to win and keep major private and public sector contracts. We do that
while navigating customer relationships and risk in complex agreements -
delivering highly sensitive, critical or essential services globally. Customer
contractual terms can be onerous and challenging to meet, leading to delays,
penalties and disputes. Delivery or service failures against obligations and
commitments could damage our brand and reputation, particularly for critical
infrastructure contracts or security and data protection services.
Supply management - We have lots of suppliers. Successfully selecting,
bringing on board and managing them is essential for us to deliver quality
products and services. We must make decisions about suppliers on
concentration, capability, resilience, security, sustainability, cost and
broader issues that could affect our business and reputation.
15. Adjustments to prior period published financial information: Formation of
International CFU and segmental re-presentations
We have re-presented certain H1 FY25 comparatives to reflect changes in the
Group's internal reporting structure. The International CFU was separated from
Business forming a new CFU, effective from 1 July 2025.
In addition, two re-presentations have been made to segmental revenue
reporting, consistent with the information now provided to the BT Group
Executive Committee, which is the key management committee and represents the
'chief operating decision maker' (CODM):
• Certain Openreach pass-through services previously reported as
external revenue in Business have been reclassified to Openreach to reflect
the customer relationship. As a result of this change the prior year
comparatives have been re-presented to present revenue on a consistent basis
resulting in a £46m reduction in Business segment revenue for the half year
to 30 September 2024, with no impact on Openreach segmental revenue due to the
intra-group nature of the transaction.
• Following an update to the commercial terms governing a trading
relationship between EE and BT Wholesale, BT Wholesale will now recognise
services provided to EE as part of this trading relationship as intersegment
revenue. Previously, these services were internally reported as cost recovery.
This change results in the recognition of revenue within the Business segment.
As a result of this change the prior year comparatives have been re-presented
to present revenue and cost for the segment on a consistent basis. The effect
of this change is to increase Business revenue by £42m, with a corresponding
increase in cost.
Further to the re-presentations made during the period, we have revised the
presentation of the disaggregation of external revenue. This change reflects
the internal reporting structure provided to the CODM. Revenue previously
reported under "Equipment and Other Services" has now been split into two
separate categories: "Equipment" and "Other Services", to provide greater
clarity on the nature of the revenue streams. In addition, lease revenue has
been separately disclosed to reflect its distinct contractual characteristics.
Disaggregation of revenue now includes internal revenue to better reflect the
performance of each segment, consistent with the information reviewed by the
CODM for decision-making purposes. Finally, as part of our ongoing improvement
of finance systems, we now have access to more granular information with which
to better align revenue categories. Accordingly, we have re-presented the
disaggregated revenue in note 3 to reflect this enhanced reporting.
As explained in note 1 to the condensed consolidated financial statements
(page 13) the H1 FY25 comparatives have been re-presented to reflect these
changes in line with IFRS accounting requirements. These adjustments are
reflected in the operating review section of the release and the condensed
consolidated financial statements.
The tables below presents a bridge between the results presented in the
Results for the half year to 30 September 2024 (published on 18 November 2024)
and the re-presented H1 FY25 comparatives presented within this release.
2. Operating results - by customer facing unit
Consumer Business International Openreach Other Total
£m £m £m £m £m £m
Half year to 30 September 2024: published
Segment revenue 4,836 3,865 - 3,118 5 11,824
Internal revenue (20) (54) - (1,612) - (1,686)
Adjusted external revenue 4,816 3,811 - 1,506 5 10,138
Adjusted EBITDA 1,330 747 - 2,059 (3) 4,133
Depreciation and amortisation (873) (477) - (974) (24) (2,348)
Adjusted operating profit (loss) 457 270 - 1,085 (27) 1,785
Specific items (note 5) (266)
Operating profit 1,519
Consumer Business International Openreach Other Total
£m £m £m £m £m £m
Half year to 30 September 2024: adjustments for re-presentation
Segment revenue - (1,221) 1,220 - - (1)
Internal revenue - (45) - 46 - 1
Adjusted external revenue - (1,266) 1,220 46 - -
Adjusted EBITDA - (91) 91 - - -
Depreciation and amortisation - 117 (117) - - -
Adjusted operating profit (loss) - 26 (26) - - -
Specific items (note 5) -
Operating profit -
Consumer Business International Openreach Other Total
£m £m £m £m £m £m
Half year to 30 September 2024: re-presented
Segment revenue 4,836 2,644 1,220 3,118 5 11,823
Internal revenue (20) (99) - (1,566) - (1,685)
Adjusted external revenue 4,816 2,545 1,220 1,552 5 10,138
Adjusted EBITDA 1,330 656 91 2,059 (3) 4,133
Depreciation and amortisation (873) (360) (117) (974) (24) (2,348)
Adjusted operating profit (loss) 457 296 (26) 1,085 (27) 1,785
Specific items (note 5) (266)
Operating profit 1,519
3. Operating results - disaggregation of revenue
Consumer Business International Openreach Other Internal Revenue Total
£m £m £m £m £m £m £m
Half year to 30 September 2024: published
ICT and managed networks - 1,633 - - - - 1,633
Fixed access subscriptions 2,164 1,026 - 1,461 - - 4,651
Mobile subscriptions 1,813 609 - - - - 2,422
Equipment and other services 839 543 - 45 5 - 1,432
Total adjusted revenue 4,816 3,811 - 1,506 5 - 10,138
Specific items (note 5) (21)
Total revenue 10,117
Consumer Business International Openreach Other Internal Revenue Total
£m £m £m £m £m £m £m
Half year to 30 September 2024: adjustments for re-presentation
ICT and managed networks - (1,058) 440 - - (1) (619)
Fixed access subscriptions (39) 29 570 (1,461) - (21) (922)
Mobile subscriptions (25) (183) 16 - - (23) (215)
Other service (839) (200) 50 31 - (103) (1,061)
Equipment revenue 847 241 139 - - (1) 1,226
Revenue from contracts with customers (56) (1,171) 1,215 (1,430) - (149) (1,591)
Lease revenue 76 4 5 3,042 - (1,536) 1,591
Revenue before specific items 20 (1,167) 1,220 1,612 - (1,685) -
Consumer Business International Openreach Other Internal Revenue Total
£m £m £m £m £m £m £m
Half year to 30 September 2024: re-presented
ICT and managed networks - 575 440 - - (1) 1,014
Fixed access subscriptions 2,125 1,055 570 - - (21) 3,729
Mobile subscriptions 1,788 426 16 - - (23) 2,207
Other service - 343 50 76 5 (103) 371
Equipment revenue 847 241 139 - - (1) 1,226
Revenue from contracts with customers 4,760 2,640 1,215 76 5 (149) 8,547
Lease revenue 76 4 5 3,042 - (1,536) 1,591
Revenue before specific items 4,836 2,644 1,220 3,118 5 (1,685) 10,138
Specific items (note 5) (21)
Total revenue 10,117
16. Post balance sheet events
We have completed the sale of our domestic operations in Italy in October
2025. The assets and liabilities were classified as held for sale at 30
September 2025. At initial classification as held for sale, the carrying
amount of the non-current assets within the disposal group were remeasured to
nil and an impairment was recognised. A net loss of approximately £87 million
is expected to be recognised in H2.
In addition, the sale of our datacentre business in Ireland also completed in
October 2025. The assets and liabilities were classified as held for sale at
30 September 2025 and a gain on disposal of £15 million is expected to be
recognised in H2.
The divestments align with the Group's strategy to focus on UK connectivity
and streamline its international footprint.
On 13 November 2025, BT Finance plc, a wholly owned subsidiary of British
Telecommunications plc, agreed Final Terms for the issuance of a 7-year
EUR850m bond. Settlement is on 17 November 2025.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
• the condensed set of financial statements has been prepared in
accordance with UK-adopted IAS 34 'Interim Financial Reporting';
• the interim management report includes a fair review of the
information required by DTR 4.2.7R (the indication of important events and
their impact during the first six months and description of principal risks
and uncertainties for the remaining six month of the year); and
• the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the Board
Simon Lowth
Director
14 November 2025
INDEPENDENT REVIEW REPORT TO BRITISH TELECOMMUNICATIONS PLC
Conclusion
We have been engaged by British Telecommunications Plc ("the Company") to
review the condensed set of consolidated financial statements in the
half-yearly financial report for the six months ended 30 September 2025 which
comprises the Group Income Statement, Group statement of comprehensive income,
Group balance sheet, Group statement of changes in equity, Group cash flow
statement and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of consolidated financial statements in the
half-yearly financial report for the six months ended 30 September 2025 is not
prepared, in all material respects, in accordance with IAS 34 Interim
Financial Reporting as adopted for use in the UK and the Disclosure Guidance
and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority
("the UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the UK.
A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other information
contained in the half-yearly financial report and consider whether it contains
any apparent misstatements or material inconsistencies with the information in
the condensed set of consolidated financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of consolidated
financial statements included in the half-yearly financial report in
accordance with IAS 34 as adopted for use in the UK.
In preparing the condensed set of consolidated financial statements, the
directors are responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend
to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of consolidated financial statements in the half-yearly financial report
based on our review. Our conclusion, including our conclusions relating to
going concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Jonathan Mills
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square, London, E14 5GL
14 November 2025
Additional Information
Notes
Our commentary focuses on the trading results on an adjusted basis, which is a
non-GAAP measure, being before specific items. The directors believe that
presentation of the group's results in this way is relevant to an
understanding of the group's financial performance as specific items are those
that in management's judgement need to be disclosed by virtue of their size,
nature or incidence. This is consistent with the way that financial
performance is measured by management and reported to the Board and the
Executive Committee of BT Group plc and assists in providing a meaningful
analysis of the trading results of the group. In determining whether an event
or transaction is specific, management considers quantitative as well as
qualitative factors such as the frequency or predictability of occurrence.
Reported revenue, reported operating profit, reported profit before tax and
reported net finance expense are the equivalent unadjusted or statutory
measures. Reconciliations of reported to adjusted revenue, operating costs,
operating profit and profit before tax are set out in the group income
statement. Reconciliations of adjusted UK service revenue, adjusted earnings
before interest, tax, depreciation and amortisation from the nearest measures
prepared in accordance with IFRS are provided in this Additional Information.
Adjusted UK service revenue
Adjusted UK service revenue is one of the group's key performance indicators
by which our financial performance is measured. Adjusted UK service revenue
comprises all UK revenue less UK equipment revenue. Some revenue from
equipment is included within adjusted UK service revenue where that equipment
is sold as part of a managed services contract, or where that equipment cannot
be practicably separated from the underlying service. We consider adjusted UK
service revenue to be an important indicator of the successful delivery of our
refreshed corporate strategy because it measures the predictable and recurring
revenue from our core UK business. A reconciliation of reported revenue, the
most directly comparable IFRS measure, to adjusted UK service revenue, is set
out below.
Half year to 30 September
2025 2024
£m £m
Reported revenue 9,810 10,117
Specific revenue (4) 21
Adjusted revenue 9,806 10,138
Of which International(1) revenue (1,110) (1,220)
Adjusted UK revenue 8,696 8,918
Equipment revenue (excluding International)(2) (970) (1,091)
Adjusted UK service revenue 7,726 7,827
(1 ) UK revenue excludes revenue generated from our International CFU
(2 ) UK Equipment revenue includes £4m (H1 FY25: £4m) of equipment
revenue recognised as lease revenue in Note 3.
( )
Reconciliation of adjusted earnings before interest, tax, depreciation and
amortisation
In addition to measuring financial performance of the group and
customer-facing units based on adjusted operating profit, we also measure
performance based on adjusted EBITDA. Adjusted EBITDA is defined as the group
profit or loss before specific items, net finance expense, taxation,
depreciation and amortisation and share of post tax profits or losses of
associates and joint ventures.
We consider adjusted EBITDA to be a useful measure of our operating
performance because it approximates the underlying operating cash flow by
eliminating depreciation and amortisation. Adjusted EBITDA is not a direct
measure of our liquidity, which is shown by our cash flow statement, and needs
to be considered in the context of our financial commitments.
A reconciliation of reported profit for the period, the most directly
comparable IFRS measure, to adjusted EBITDA, is set out below.
Half year to 30 September
2025 2024
£m £m
Reported profit for the period 981 1,137
Tax 211 212
Reported profit before tax 1,192 1,349
Net finance expense 279 167
Depreciation and amortisation 2,417 2,348
Specific revenue (4) 21
Specific operating costs before depreciation and amortisation 232 245
Share of post tax (profits) losses of associates and joint ventures 9 3
EBITDA 4,125 4,133
(1)See Glossary on page 7.
Adjustments to prior period published financial information: formation of
International CFU and segmental re-presentations
We have re-presented certain H1 FY25 comparatives to reflect changes in the
Group's internal reporting structure. The International CFU was separated from
Business forming a new CFU, effective from 1 July 2025.
In addition, two re-presentations have been made to segmental revenue
reporting, consistent with the information now provided to the BT Group
Executive Committee, which is the key management committee and represents the
'chief operating decision maker' (CODM):
• Certain Openreach pass-through services previously reported as
external revenue in Business have been reclassified to Openreach to reflect
the customer relationship. As a result of this change the prior year
comparatives have been re-presented to present revenue on a consistent basis
resulting in a £46m reduction in Business segment revenue for the half year
to 30 September 2024, with no impact on Openreach segmental revenue due to the
intra-group nature of the transaction.
• Following an update to the commercial terms governing a trading
relationship between EE and BT Wholesale, BT Wholesale will now recognise
services provided to EE as part of this trading relationship as intersegment
revenue. Previously, these services were internally reported as cost recovery.
This change results in the recognition of revenue within the Business segment.
As a result of this change the prior year comparatives have been re-presented
to present revenue and cost for the segment on a consistent basis. The effect
of this change is to increase Business revenue by £42m, with a corresponding
increase in cost.
The tables below present a bridge between the results presented in the Results
for the half year to 30 September 2024 (published on 18 November 2024) and the
re-presented H1 FY25 comparatives presented within this release.
Re-presentation of the notes to the consolidated financial statements have
been detailed in note 15.
Half year to 30 September 2024 Reported Re-presentation adjustment Re-presented
£m £m £m
Adjusted UK service revenue
Consumer 3,989 - 3,989
Business 2,410 (12) 2,398
International - - -
Openreach 3,118 - 3,118
Other 5 - 5
Intra-group items (1,686) 3 (1,683)
Total Group 7,836 (9) 7,827
Adjusted operating costs
Consumer 3,506 - 3,506
Business 3,118 (1,130) 1,988
International - 1,129 1,129
Openreach 1,059 - 1,059
Other 8 - 8
Intra-group items (1,686) 1 (1,685)
Total Group 6,005 - 6,005
Capital expenditure
Consumer 570 - 570
Business 328 (59) 269
International - 59 59
Openreach 1,329 - 1,329
Other 42 - 42
Total Group 2,269 - 2,269
Forward-looking statements - caution advised
Certain information included in this announcement is forward looking and
involves risks, assumptions and uncertainties that could cause actual results
to differ materially from those expressed or implied by forward looking
statements. Forward looking statements cover all matters which are not
historical facts and include, without limitation, projections relating to
results of operations and financial conditions and the Company's plans and
objectives for future operations. Forward looking statements can be identified
by the use of forward looking terminology, including terms such as 'believes',
'estimates', 'anticipates', 'expects', 'forecasts', 'intends', 'plans',
'projects', 'goal', 'target', 'aim', 'may', 'will', 'would', 'could' or
'should' or, in each case, their negative or other variations or comparable
terminology. Forward looking statements in this announcement are not
guarantees of future performance. All forward looking statements in this
announcement are based upon information known to the Company on the date of
this announcement. Accordingly, no assurance can be given that any particular
expectation will be met and readers are cautioned not to place undue reliance
on forward looking statements, which speak only at their respective dates.
Additionally, forward looking statements regarding past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules and the Disclosure Guidance
and Transparency Rules of the Financial Conduct Authority), the Company
undertakes no obligation to publicly update or revise any forward looking
statement, whether as a result of new information, future events or otherwise.
Nothing in this announcement shall exclude any liability under applicable laws
that cannot be excluded in accordance with such laws.
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