BT Group Stock Down On Weak FY23 Pre-tax Profit; Sees Pro Forma Growth In FY24

Shares of BT Group Plc were losing around 8 percent in the morning trading in London after the British telecommunications holding company on Thursday reported weak profit and revenues in its fiscal 2023. A growth in Openreach was more than offset by decline in the other units. The company further announced a flat dividend.

Looking ahead for fiscal 2024, the company said expects revenue and EBITDA growth on a pro forma basis.

Normalised free cash flow for FY24 is expected to be between 1.0 billion pounds and 1.2 billion pounds, lower than last year’s 1.3 billion pounds.

Beyond fiscal 2024, the company continues to expect consistent and predictable adjusted revenue and adjusted EBITDA growth driven by CPI-linked pricing and by cost transformation.

The company further said it expects to be a significant beneficiary of the UK Government’s full expensing scheme from FY24-FY26 and expect to pay no UK cash tax for the next three years.

Philip Jansen, Chief Executive, said, “We have delivered our outlook for FY23: this year we’ve grown both pro forma revenue and EBITDA for the first time in six years while navigating an extraordinary macro-economic backdrop. Over the last four years we have stuck firmly to our strategy and it’s working. Openreach is competing strongly …. The Openreach Board has reaffirmed its target to reach 25 million premises with FTTP by the end of 2026 and plans to further accelerate take-up on the network.”

For the fiscal 2023, the company will pay a final dividend of 5.39 pence per share, bringing the full year total dividend to 7.70 pence per share, unchanged from last year. The final dividend will be paid on September 13.

For the full year, the telecom provider posted a pre-tax income of 1.729 billion pounds, 12 percent lesser than 1.963 billion pounds in the previous fiscal. Adjusted pre-tax profit was at 2.290 billion pounds, as against last year’s 2.351 billion pounds.

Post-tax profit stood at 1.905 billion pounds or 18.9 pence per share, up 50 percent from 1.274 billion pounds or 12.5 pence per share a year ago.

Adjusted post-tax earnings moved up to 2.158 billion pounds or 21.4 pence per share from previous year’s 2.002 billion pounds or 19.7 pence per share.

Operating income was at 2.619 billion pounds, versus 2.885 billion pounds in 2022.

Adjusted EBITDA grew 5 percent to 7.928 billion pounds from 7.577 billion pounds a year ago, due to growth in Openreach and Consumer, partly offset by a decline in Enterprise.

Revenue was 20.681 billion pounds, 1 percent lower than 20.850 billion pounds in 2022.

On a Sports Joint Venture pro forma basis, revenue went up 1 percent and adjusted EBITDA grew 3 percent.

In London, BT Group shares were trading at 136.99 pence, down 7.5 percent.

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