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BT shares soar despite profit dive 

2024-05-17  Correspondent

BT shares soar despite profit dive 

LONDON - Shares in BT surged yesterday after the British telecoms group ramped up its dividend, extended a major cost-cutting drive and posted a well-received outlook, offsetting news of tumbling annual profits. 

Shares soared more than 11% to 125.65 pence, heading London’s top-tier FTSE 100 index, which was down overall.

“New guidance for significantly increased cash flow, more cost- savings and a higher dividend for shareholders all combined to deliver a bumper package of good news,” said AJ Bell investment director Russ Mould.

“Many people assumed BT would continue to be weighed down by the hefty investment into upgrading its infrastructure, and that ongoing takeover speculation would be the only catalyst to move the share price higher.”

BT also announced that profit after tax dived to £855 million (US$1.1 billion) in the group’s financial year that ran to the end of March, from £1.9 billion in 2022/2023. 

The group’s performance was dented by higher costs and depreciation, although revenue rose one percent to £20.8 billion on price hikes, amid elevated inflation.

BT is in the process of axing up to 55 000 jobs, or 42% of its workforce, by the end of the decade, amid a tech jobs cull in response to rampant inflation. The company has achieved a target of £3 billion in cost savings since 2020, one year ahead of schedule, and will target the same amount by 2029, it added

“As we move into the next phase of BT Group’s transformation, we are sharpening our focus... by accelerating the modernisation of our operations, and by exploring options to optimise our global business,” chief executive Allison Kirkby said in the earnings release.

“This will create a simpler BT Group, fully focused on connecting the UK, and well-positioned to generate significant growth for all our stakeholders.”

Kirkby in January replaced Philip Jansen, who announced the huge job losses. She is the first woman to head the former nationalised group in its 170-year history. - Nampa/AFP

2024-05-17  Correspondent

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