BT Group PLC reported lower revenue and profit but said it is making progress on its turnaround strategy and is on track to meet its financial outlook for the year.
In a trading update for its third quarter to end-December, the telecoms group reported revenue of £4.98 billion, down 4% compared to the previous year and slightly below City forecasts of £5.1 billion.
Adjusted EBITDA of £2.1 billion was down 1%, but in line with expectations. Earnings were broadly flat if excluding the impact of one-off factors, with lower revenue offset by continued strong cost transformation.
Profit before tax of £183 million, down £244 million, driven by a £214 million share of losses from the sports TV joint venture.
Chief executive Allison Kirkby said: “BT continues to deliver on its strategy – building and connecting the UK to the best next-generation networks at record pace, while accelerating our transformation”.
The Q3 performance was impacted by contract milestones, mainly in the financial and public sectors and wholesale, as well as the phasing of costs across quarters
Kirkby said BT remained on track for the financial outlook and guidance for this year, and a cash flow "inflection" to circa £2.0 billion next year, and to circa £3 billion by the end of the decade.
All five targeted international disposals have now been completed, with cost cutting across all units to offset higher employer costs of the UK National Living Wage and National Insurance contributions, with the workforce cut 7% to 108,000 and Openreach repair volumes down 18%.
With the Openreach full fibre broadband network now reaching 21.4 million premises, over 1 million premises were added for the eighth quarter running, a pace BT described as the fastest build by any company in Europe.
Some 571,000 new full fibre connections were made in the quarter, up 21% year-on-year, lifting its take-up rate to over 38%. Revenue per broadband user rose 4% to £16.80, helped by greater fibre adoption, higher speeds and price increases.