BT cuts revenue guidance amid slowing demand

BT has cut its revenue guidance for the year ahead by 1 to 2 per cent following weaker demand from businesses and the public sector.
Profit before tax fell by 10 per cent, thanks to slowing international sales and increasing competition coupled with higher finance expenses, to £967 million in the six months to the end of September.
Adjusted first-half revenue fell by 3 per cent to £10.1 billion. In the company’s business division it was down 6 per cent to £3.9 billion and the consumer sector was down 1 per cent to £4.8 billion.
The falls in its business and consumer divisions were broadly offset by growth in Openreach, BT’s broadband division, where revenue rose 2 per cent to £3.1 billion, partly buoyed by price increases.
Allison Kirkby, nine months into the chief executive role, summarised the numbers: “Openreach had a stellar start to the year, consumer is on track for a return to growth in the second half and we’re ramping up our efforts to simplify and turnaround business [division]. Of course, there’s still more to do to fully modernise BT, but we’re working at pace to realise our ambition to be the digital backbone of the country.”
Shares in BT fell 5p, or 3.6 per cent, to close at 137p.
Reflecting on speculation that BT could sell its global division, Kirkby said: “​​We are sharpening our focus around the UK and we are internally preparing for a carve out of that global segment that has very much been a drag in the first half.”
She added: “Time will tell what we do with that global business … it could be a smaller, more profitable business in the future, or it could be an opportunity for us to consolidate with other telcos that have similar businesses, because it’s been a challenging segment for all telcos for a number of years.”
Giving an update on infrastructure investment, BT said that the reducing costs of connecting full-fibre broadband, which gives customers superfast, consistent internet speed, means that Openreach is increasing its build target, connecting 4.2 million new premises this year with no extra investment. It aims to hit 25 million premises by the end of 2026.
BT’s net debt rose to £20.3 billion at the end of September, from £19.5 billion in March, because of scheduled pension payments and the timing of the final dividend, the company said.
Kirkby had a bulging in tray when she started her job: BT has had to face the cost of investing in infrastructure, a heavily unionised workforce, price-sensitive consumers, a large pension deficit, a struggling business division and the need to cut costs.
In May, during the company’s first-quarter results, she described the business as at an inflection point in its strategy, having passed the peak of its capital spending a year earlier than expected and being able to move on to the next phase.
For the first half of the year, capital expenditure was down 2 per cent to £2.3 billion. Going forward, the company said, this would be less than £4.8 billion until the end of 2026 before reducing by about £1 billion after the peak of the fibre programme.
Kirkby is the first female chief executive in the former state monopoly’s 170 years, a former BT board member and is a former boss of the telecoms provider Telia, part-owned by the Swedish government.
BT, which was privatised in 1984, also owns the EE mobile network and it recently rebranded all its consumer offerings as EE. It also operates TNT Sports, formerly known as BT Sport, in a joint venture with Warner Bros Discovery.
The group has had a shareholder shakeup in recent months as in September the 84-year-old Mexican telecoms billionaire Carlos Slim increased his BT stake to 4.3 per cent in a £150 million deal while Sunil Mittal’s conglomerate Bharti Enterprises bought a 24.5 per cent stake from Patrick Drahi’s Altice Group a month before.