| Allison Kirkby, Chief Executive, commenting on the results, said |
| “We have accelerated the modernisation of BT Group in the first half of the year. We’ve ramped up our full fibre build and connections, seen further improvements in customer satisfaction, and our cost transformation contributed to growth in EBITDA and normalised free cash flow despite revenue declines driven by our non-UK operations and a competitive retail environment. |
| “Our nationwide full-fibre rollout has set new records, now reaching more than 16 million premises, and we have further extended our industry-leading take-up rate to 35%. Our cost to build continues to reduce, enabling us to increase this year's build target to 4.2 million with no additional capex spend. We also expanded our 5G network to cover 80% of the UK population, more than any other operator. These investments in the UK’s next-generation networks are enabling much better experiences, reflected in our improved net promoter scores. |
| “We are confirming our EBITDA, capex and cash flow guidance for FY25, albeit on lower revenue guidance. We remain firmly on track to meet our long-term cost savings and cash flow targets, and today announce an interim dividend of 2.40pps. The accelerated modernisation of our operations, combined with a focus on connecting the UK, puts us in a strong position to generate significant value for all our stakeholders.” |
| Solid progress on strategic priorities |
- Record FTTP build rate of 2.1m in the half with FTTP footprint passing 16m premises, around half of the UK, in October. We have increased our FY25 build target to 4.2m within our existing capex envelope driven by build cost efficiencies; on track to reach 25m by December 2026
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- Strong customer demand for Openreach FTTP with record net adds of 446k in Q2; total premises connected 5.5m with an increased and market-leading take-up rate of 35%. Growth in FTTP as a proportion of the broadband base contributed to a reduction in 12-month repair volumes of 0.3m to 3.0m, supporting growth in margin and EBITDA.
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- Openreach broadband ARPU in H1 grew year-on-year by 6% to £16, ahead of the CPI price increases, driven by a greater FTTP take-up and speed mix; Openreach broadband line losses in H1 were 377k, a 2% decline in the broadband base - we continue to see moderately higher competitor losses with weaker overall broadband and new homes market.t
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- Retail FTTP base grew by 35% year-on-year to 3.0m of which Consumer 2.8m and Business 0.2m; 5G base 12.5m, up 25% year-on-year.
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- Consumer postpaid mobile base at 13.9m; Consumer broadband base marginally lower at 8.2m. Consumer ARPUs relatively stable despite lower CPI benefits
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- Business revenue declined due primarily to non-UK trading in our Global and Portfolio channels.
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- Cost transformation on track with £433m gross annualised cost savings during H1 FY25; Total Labour Resource down 2k to 118k and down 4% year-on-year
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- BT Group NPS of 25.6, up 3.1 points year-on-year, further improving customer experience.
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| Continued EBITDA and normalised free cash flow1 improvement: |
- Adjusted1 revenue £10.1bn, down 3% mainly due to challenging conditions in Business, principally driven by non-UK trading in our Global and Portfolio channels. In the rest of the Group, lower CPI benefits and continued competitive markets in Consumers were broadly offset by growth in Openreach due to the benefit of price increases, Ethernet base growth and improving FTTP volume and mix; reported revenue £10.1bn, down 3%
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- Adjusted1 EBITDA £4.1bn, up 1%, with revenue flow through more than offset by cost transformation
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- Reported profit before tax £1.0bn, down 10% primarily due to lower revenue, higher specific costs and higher net finance expenses, partly offset by a reduction in reported operating costs
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- Capital expenditure ('capex') £2.3bn, down 2% with peak reported capex passed in FY24, primarily driven by lower networks spend despite higher FTTP build due to reduced unit costs and efficiencies; cash capex of £2.5bn in line with the prior year
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- Net cash inflow from operating activities £3.0bn; normalised free cash flow1 £0.7bn, up 57% due to higher EBITDA, working capital timing and a tax refund
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- Net debt £20.3bn (31 March 2024: £19.5bn), increased mainly due to our scheduled pension scheme contributions of £0.8bn with cash inflow offset by the payment of the final dividend
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- Gross IAS 19 pension deficit of £4.3bn, a decrease from £4.8bn on 31 March 2024 mainly due to scheduled contributions, partly offset by lower than required asset returns in the period
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- Interim dividend of 2.40 pence per share (pps) up from 2.31pps in H1 FY24 in line with our policy of paying 30% of the prior year's full-year dividend pps. FY24 final dividend paid in September was fully covered by normalised free cash flow
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- FY25 Outlook: FY25 guidance reiterated for adjusted EBITDA1, capital expenditure and normalised free cash flow1. FY25 revenue guidance was revised down 1-2% primarily reflecting weaker non-UK trading including reduced low-margin kit sales, along with a softer environment in the Corporate and Public Sector
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- Mid-term guidance: Sustained adjusted1 revenue growth and EBITDA growth ahead of revenue, enhanced by cost transformation from FY26 to FY30; capital expenditure excluding spectrum less than £4.8bn until FY26, reducing by c. £1bn post peak FTTP build; normalised free cash flow of c. £2.0bn in FY27 and c. £3.0bn by the end of the decade
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| BT Group |
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