LONDON (Alliance News) - BT Group PLC Thursday reported a rise in pretax profit for its most recently ended financial year, and set out its guidance for the next two years, as the FTSE 100 telecommunications firm outlined plans to invest around GBP6 billion in broadband and 4G coverage in the UK over the next three years.
BT reported a pretax profit of GBP3.03 billion for the year to end-March, up from GBP2.65 billion the year before, as revenue rose to GBP19.04 billion from GBP17.98 billion.
It reported earnings before interest, tax, depreciation and amortisation of GBP6.37 billion, up from GBP6.02 billion. BT said it expects to report Ebitda of around GBP7.9 billion in the coming financial year, and further growth in the year after.
BT proposed a full-year dividend of 14.0 pence per share, up 13% from 12.4p the year before. It expects to grow its dividend by more than 10% in each of the next two financial years.
The company said the integration of its acquisition of mobile operator EE Ltd, which was cleared by regulators earlier this year, is going well, and it now sees the opportunity for more synergies than it originally expected and at a lower cost.
BT also set out plans to invest further in the UK, saying its Openreach and EE businesses will make around GBP6 billion in capital expenditure over the next three years in the first phase of a plan to extend superfast broadband and 4G coverage beyond 95% of the country by 2020.
"This has been a landmark year for BT. We've completed our acquisition of EE, the UK's best 4G mobile network provider, we've passed more than 25 million premises with fibre, and we've also delivered a strong financial performance. We've met our outlook with our main revenue measure up 2.0%, the best performance for more than seven years. Our profit before tax was up a healthy 9%," said Chief Executive Gavin Patterson in a statement.
"Our strong overall performance for the year is reflected in our full-year dividend, which is up 13%. Our results and the investments we're making position us well to continue to grow in the coming years. In light of our confidence we are setting out financial and dividend guidance for the next two years," Patterson added.
Rival Sky PLC hit back at BT's investment plans, renewing its call for BT's infrastructure division Openreach to be split-off from BT.
"Today's statement shows that BT continues to see copper as the basis of its network for 21st century Britain. Despite BT's claims, it is clearer than ever that their plans for fibre to the premise broadband will bypass almost every existing UK home," said Group Chief Operating Officer and Chief Financial Officer of Sky Andrew Griffith in a statement.
"This limited ambition has been dragged out of BT by the threat of regulatory action, demonstrating once again why an independent Openreach, free to raise its own long-term capital, is the best way for the UK to get the fibre network it needs," Griffith added.
Shares in BT were up 3.3% at 453.90 pence Thursday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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BT (BT.A)