BT Group PLC (LSE:BT.A) reported broadly flat revenues as it signalled further cost-cutting measures were needed to deal with mounting inflationary pressures buffeting the UK economy.
The FTSE 100-listed group also reported an 89,000 fall in broadband customers and blamed industrial action for around 40,000 of the slide.
Unveiling results for the half-year to 30 September 2022, BT said revenues of £10.4bn were up 1% due to growth in Consumer and Openreach partially offset by declines in large corporate customers in Enterprise, lower equipment sales in Global and the impact of the BT Sport disposal.
Adjusted EBITDA rose 3% to £3.9bn, reflecting revenue growth, continued strong cost control and some one-off items, partially offset by increased energy costs and cost inflation.
But reported profit before tax fell 18% to £0.8bn due to increased depreciation from network build and higher specific costs offsetting adjusted EBITDA growth.
BT said increasing inflationary pressures meant it had increased its full-year 2025 cost-savings target by £500mln to £3bn to help fund the rising cost of building its fibre network.
Philip Jansen, chief executive, said: “Given the current high inflationary environment, including significantly increased energy prices, we need to take additional action on our costs to maintain the cash flow needed to support our network investments.”
“As a result, we are increasing our cost-savings target from £2.5bn to £3.0bn by the end of FY25.”
Reported capital expenditure was 2% higher at £2.6bn and BT increased its full-year 2023 capex outlook from c.£4.8bn to c.£5.0bn due to higher fibre connections and inflation, enabled by a £0.2bn tax refund in October.
An interim dividend of 2.31p was also announced.