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BT considers dividend cut in 'a year or two' to fund full fibre broadband roll-out

BT will also look at reducing capital expenditure, cutting costs and borrowing more to help fund the expansion of the fibre broadband network

BT plans to connect 15mln homes to superfast broadband

BT Group PLC (LON:BT.A) has warned investors that it may cut its dividend in the near future as invests heavily in the roll out of full fibre broadband across the UK.

Speaking at the group’s annual general meeting on Wednesday, chairman Jan du Plessis said the company will consider reducing the dividend in “a year or two in the future”, according to the Financial Times.

A dividend cut would be one way to fund the telecoms giant’s plans to connect 15mln homes to superfast broadband, he said.

READ: BT explores sale of Spanish business as part of turnaround plan

BT will also look at reducing capital expenditure, cutting costs and borrowing more to help fund the expansion of the fibre broadband network.

Philip Jansen, who took over as chief executive of BT this year, told the FT on the sidelines of the meeting that it would cost between £400mln and £600mln in extra capital a year to bring full fibre to 15mln premises.

On its turnaround plan, BT asked shareholders to be patient with the chairman saying “What I cannot offer is a quick fix”.

BT’s shares have fallen to less than 200p from 500p three years ago amid concerns about a regulatory clampdown, tough competition in the consumer arm, ongoing struggles in the enterprise businesses and the Global Services international division, a high cost base and a massive pension and net debt position.

The company is also still recovering from an accounting scandal at its Italian unit in 2017 that sliced off a big chunk of its market value and dented profits.

More than 8% of shareholders voted against BT’s remuneration reported at the AGM on Wednesday. Last year a third of shareholders opposed executive pay.

Quick facts: BT Group PLC

Price: 147.76 GBX

Market: LSE
Market Cap: £14.62 billion

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