Final results from BT Group PLC (LSE:BT.A) came in short of expectations but the telecoms group nudged its dividend higher as new boss Allison Kirkby said the telecoms company had "now reached the inflection point on our long-term strategy".
Shares in the FTSE 100 group surged 10.5% higher to 125p in what is set to be the best one-day gain in two and a half years.
Kirkby, who joined in February from Swedish telco Telia, said that the inflection is triggered by the company passing the peak point of its capital investment into its fibre broadband rollout and achieving its £3 billion cost-cutting programme a year early.
She said the next phase of BT's transformation will see a sharper focus on customers in the UK, "by accelerating the modernisation of our operations, and by exploring options to optimise our global business," implying further sales of overseas operations are coming.
With the plan now to more than double free cash flow over the next five years, she says this enables the board to increase the dividend, with a final dividend of 5.69p per share making a total of 8.0p, up 3.9% compared to a year ago.
Kirkby has also set a new £3 billion target of gross annualised cost savings to be reached by the end of March 2029.
As for the top line numbers for the year to March 2024, revenue of £20.8 billion was up 1% on the prior year, which was slightly below the average City analyst's forecast of £20.9 billion as fourth-quarter revenue came in at £5.08 billion versus the £5.16 billion forecast.
Underlying profits (adjusted EBITDA) were up 2% to £8.10 billion, again a smidge below the consensus of £8.15 billion, as the fourth quarter saw a 3% decline.
Adjusted earnings per share down 16% to 18.5p, some way below the consensus EPS forecast of 19.2p.
On the outlook, revenue is guided to growth between 0% and 1% and EBITDA just above flat to around £8.2bn (forecasts are currently at around £8.3 billion), with capital expenditure excluding spectrum less than £4.8 billion and normalised free cash flow of around £1.5 billion.