British Telecom (BT) has closed its fiscal year 2026, which ended on March 31, with a net profit of 1.077 billion pounds sterling (1.246 billion euros), representing an increase of 2% compared to the 1.054 billion pounds (1.220 billion euros) obtained in the previous year, according to the accounts released this Thursday by the operator, which has also decided to increase the dividend to be distributed among its shareholders by 2%.
The group's turnover stood at 19.654 billion pounds sterling (22.745 billion euros), 3% below the 20.358 billion pounds (23.569 billion euros) recorded in the previous year. The company attributes this decline in revenue to a decrease in international sales and lower commercialization of terminals in the United Kingdom.
BT's adjusted operating income (Ebitda) reached 8.230 billion pounds sterling (9.524 billion euros), a slight increase of 0.3% compared to the 8.209 billion pounds (9.500 billion euros) of the previous year.
At the close of the fiscal year, the multinational's net debt rose to 19.966 billion pounds sterling (23.105 billion euros), 1% more than the 19.816 billion pounds (22.931 billion euros) recorded twelve months earlier.
"We have met our financial forecasts and are advancing in our transformation beyond expectations, overcoming challenges and competing successfully. Today we announce an increase in the annual dividend to 8.32 pence (0.096 euros) per share and an updated dividend policy, and we reiterate our forecasts for sustained growth, including a cash flow inflection point to approximately 2 billion pounds sterling (2.314 billion euros) in fiscal year 2027 and to approximately 3 billion pounds sterling (3.472 billion euros) by the end of the decade," explained BT's Chief Executive Officer, Allison Kirkby.
The dividend rises and BT revises its remuneration policy
The company will pay a final dividend of 5.87 pence per share (0.068 euros), 2% above the previous 5.76 pence (0.076 euros), bringing the total annual payment to 8.32 pence (0.096 euros) per share.
In addition, the company has revised its shareholder remuneration policy to establish an annual dividend increase of low to mid-single digits from fiscal year 2027 until parameters compatible with a 'BBB+' credit rating are achieved. Once this objective is reached, excess cash flow will be used to reinforce shareholder distributions.
For fiscal year 2027, BT estimates adjusted revenues between £19 billion and £19.5 billion (€21.987 billion and €22.565 billion) and an adjusted Ebitda in the range of £8.2 billion to £8.3 billion (€9.490 billion and €9.606 billion).
The company also foresees capital investments, excluding spectrum, of around £4.3 billion (€4.976 billion) and a normalized free cash flow close to £2 billion (€2.315 billion).
Medium-term objectives and cash flow improvement
Regarding its medium-term goals, BT anticipates sustained growth in adjusted revenues and adjusted UK service sales, as well as a continued increase in adjusted Ebitda, exceeding the pace of service revenue growth in that market, supported by its cost transformation plan.
Likewise, the company expects to cut capital expenditures, excluding spectrum, by more than £1 billion (€1.157 billion) compared to the fiscal year 2026 level, and to achieve a normalized free cash flow of around £3 billion (€3.472 billion) towards the end of the decade.