BT hikes dividend, sees cash flow soar after fibre peak

BT hikes dividend, forecasts doubling cash flow after surpassing peak fibre investment.

BT Group (LSE: BT.A) lifted its dividend payout after forecasting significantly enhanced cash flow in the coming years, with peak investment in its full-fibre broadband rollout now behind it. The telecommunications provider’s shares surged 10% on Thursday.

Chief Executive Allison Kirkby hailed reaching “the inflection point” on BT’s long-term strategy, having completed the £3 billion cost programme a year early. She outlined a path to “more than double our normalised free cash flow over the next five years”.

Kirkby predicted capital expenditure will reduce by around £1 billion post the fibre build peak, with normalised free cash flow reaching £2.0 billion in 2027 and £3.0 billion by 2029. Normalised free cash flow was £1.28 billion in the past year.

The enhanced cash flow enabled BT to increase its full-year dividend by 3.9% to 8.0p per share. Pretax profit declined 31% to £1.19 billion, impacted by a £488 million goodwill impairment.

Adjusted EBITDA rose 2.1% to £8.10 billion as cost control offset pressures. Revenue edged up to £20.80 billion, supported by price hikes and fibre product sales.

BT pledged £3 billion of further cost savings by 2029, costing £1 billion. Net cash inflow from operations fell 11% to £5.95 billion, while net debt rose to £19.5 billion due to pension contributions.

Openreach reported strong full-fibre demand, with 397,000 Q4 net adds. BT cautioned a weak broadband market could impact Openreach’s base over 12 months.

For 2025, BT forecast flat to 1% higher revenue, EBITDA around £8.2 billion, and £1.5 billion cash flow.

Significantly, Kirkby revealed BT is “exploring options” for its global business as it focuses on “connecting the UK” to “generate significant growth”.

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