BT Group (LSE: BT-A) told us Thursday that its cost savings plans are going better than expected. In first-half results, the telecoms giant said it has achieved £1bn in annual savings, 18 months ahead of target. As a result, BT has brought forward its FY25 target of £2bn annualised savings by a year. The BT share price gained 5% in early trading as a result.
The company has also reduced its plans for capital expenditure in the year to 2023. It should now come in at around £4.8bn, some £200m below previous expectations.
Openreach expansion
Openreach, BT’s full fibre broadband offering, is the jewel in the crown right now amid the rush for next-generation access. Chief executive Philip Jansen said: “After a record six months, Openreach has now rolled out full fibre broadband to almost 6 million premises and continues to lower its build cost.”
He went on to say he expects full-fibre to reach 25 million premises by 2026. What about the competition? It appears that Sky and TalkTalk have both signed up to BT’s long-term FTTP pricing offer, Equinox. They’re among 10 providers to have done so.
Looking forward, BT has confirmed its financial outlook for the current full year and for 2023.
BT share price turning?
BT has reinstated its dividend, declaring an interim payment of 2.31p per share. And it says its progressive policy should be supported by an increase in annual free cash flow of at least £1.5bn by the end of the decade.
The BT share price had slumped since its June 2021 peak. But even before Thursday’s uptick, it had started to strengthen again. BT shares are now approaching a 50% gain over the past 12 months.