BT cuts revenue outlook amid Global sale rumours

It also lowered its full-year revenue guidance due to ongoing weakness at its international operations. Instead of predicting 0%-1% growth, BT now expects revenue to fall by between 1% and 2%. Its outlook for adjusted EBITDA (£8.2 billion), capex (£4.8 billion) and normalised free cash flow (£1.5 billion) remain unchanged.

The spotlight has been on BT Global – which provides a range of connectivity, IT, security, and cloud services to corporate clients ranging from SMEs to large multinationals – ever since CEO Allison Kirkby said the telco would sharpen its focus on the UK, and explore options to "optimise" its global business.

Over the weekend, the Mail on Sunday reported that Kirkby has made it a priority to divest non-UK assets, with sources claiming she is willing to listen to offers for Global.

Global saw revenue in the six months to 30 September fall 9.9% year-on-year to £1.1 billion, dragging revenue at BT Business down 5.7% to £3.9 billion.

BT Consumer didn't exactly set the world on fire either during the first half.

Revenue inched down to £4.8 billion from £4.9 billion, while EBITDA fell slightly to £1.3 billion from £1.4 billion.

Fibre customers grew to 2.8 million from 2.08 million, but its overall broadband base fell to 8.2 million from 8.4 million. It was a similar story at its mobile division, where postpaid 5G customers grew to 10.5 million from just shy of 9 million, but its total postpaid mobile customer base fell to 13.9 million from 14.1 million.

Openreach was once again the bright spot.

BT's quasi-independent networks division set a new personal best, passing almost 2.1 million premises during the first half to reach 15.9 million. There are now 5.5 million end users hooked up to Openreach's fibre network, up from 3.9 million a year ago, giving a take-up rate of around 35%.

On top of that, Openreach continues to see a reduction in fibre deployment costs, and so it has increased this year's build-out target to 4.2 million premises without adding to the capex bill, keeping it on course to hit its objective of 25 million by December 2026.

Financially, Openreach is the standout performer too. H1 revenue grew 2.1% to £3.1 billion, while EBITDA rose 6.4% to £2.1 billion.

On a group-wide basis, first-half revenue at BT fell 3% to £10.1 billion, while EBITDA grew ever-so-slightly to £4.1 billion from £4.09 billion. Gross annualised costs fell £433 million, and the company cut 2,000 jobs – total headcount now stands at 118,000.

Kirkby said: "We have accelerated the modernisation of BT Group in the first half of the year. We've ramped up our full fibre build and connections, seen further improvements in customer satisfaction, and our cost transformation contributed to growth in EBITDA and normalised free cash flow despite revenue declines driven by our non-UK operations and a competitive retail environment."

In addition to talking up the fibre network rollout, Kirkby also highlighted the progress at mobile arm EE, which saw 5G coverage reach 80 percent of the UK population.

"The accelerated modernisation of our operations, combined with a focus on connecting the UK, puts us in a strong position to generate significant value for all our stakeholders," Kirkby said.

Significant value could potentially also be generated from the sale of Global, and it will be interesting to see whether anything develops on that front between now and the end of the year.