GCIBT sees profits drop 31%, predicts little growth this year
Telecoms giant reported a 31% drop in annual profits after taking a £488m impairment of goodwill in the year to 31 March, as it forecast little to no growth in revenues and earnings this year.
The landline, mobile and broadband provider said reported pre-tax profit totalled £1.19bn, down from £1.73bn the year before, on revenues that were just 1% higher at £20.80bn.
Consumer revenues were up 4% at £9.83bn, Openreach revenues rose 7% to £6.08bn, but Business revenues were down 2% at £8.13bn and continued to be impacted by "higher input costs, legacy declines, a one off revenue adjustment and prior year one-offs".
Normalised free cash flow was down 4% year-on-year at £1.3bn but ahead of guidance of £1.0bn-1.2bn.
Looking ahead, BT said it is targeting just 0-1% growth in adjusted revenue in the year ending March 2025, and EBITDA of £8.2bn, up from £8.1bn previously.
However, it now expects to double normalised free cash flow over the next five years, rising to £1.5bn this year, £2.0bn in 2027 and £3.0bn by the end of the decade.
"Having passed peak capex on our full fibre broadband rollout and achieved our £3 billion cost and service transformation programme a year ahead of schedule, we've now reached the inflection point on our long-term strategy," said chief executive Allison Kirkby.
The company also announced a further £3bn in gross annualised cost savings by the year ending March 2029.
"This delivery and greater capex efficiency gives us the confidence to provide new guidance for significantly increased short term cash flow and sets out a path to more than double our normalised free cash flow over the next five years. This enhanced cash flow allows us to increase our dividend for FY24 by 3.9% to 8.0 pence per share."
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