BT Group PLC (LSE:BT.A) shares rose 10% to their highest level in six years after the telecoms group reported a smaller decline in profits than expected, with UBS analyst Polo Tang noting that cost savings were offsetting revenue pressures.
The telecoms group's first-quarter results showed mostly improved operational metrics for the first quarter, while its top line fell 3.4% year-on-year, group EBITDA declined 0.5% and pre-tax profit fell 10%, with management reiterating full-year and long-term financial guidance.
Openreach revenue increased 0.5%, with the infrastructure division's EBITDA rising 4.6%, though line losses of 169,000 were an improvement and better than consensus forecasts, said Tang.
Consumer revenues fell 2.8%, while EBITDA dropped 3.5% as the division added 41,000 postpaid mobile customers and 11,000 broadband customers during the period.
Tang commented: "Q1 saw weak financials but better KPIs in Openreach/Consumer... Cost savings are offsetting revenue declines leading to almost stable EBITDA.
"While there may be a positive reaction to the improved KPIs, BT shares have already been a strong performer YTD and are at the top end of their 100-200p trading range over the past five years."
He reiterated several risks for the group, including TalkTalk’s reported asset sale, which could shift revenue away from Openreach and Sky’s ongoing migration of customers to alternative networks.
Openreach’s wholesale pricing may face downward pressure from April 2026, as alternative networks currently offer broadband at prices 20-30% lower, the analyst said.
The shares rose over 20p to 219.82p, their highest level since early summer 2019.