BT shares soar as British broadband provider targets another £3 billion in cost cuts

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A BT Group Plc logo on a EE/BT Group Plc store in London, UK, on Wednesday, May 17, 2023.
Hollie Adams | Bloomberg | Getty Images

LONDON — Shares of BT Group surged Thursday after the firm announced a target of a further £3 billion ($3.8 billion) in cost savings.

BT shares were up 14.9% at 12:40 p.m. London time after CEO Allison Kirkby said the company had passed peak capital expenditure on its fiber broadband rollout and achieved its £3 billion cost and service transformation program “a year ahead of schedule.”

This has enabled BT to issue a new target of doubling its cash flow over the next five years and raise its 2024 full-year dividend by 3.9% to 8 pence per share, Kirkby said in a statement.

BT posted revenue of £20.8 billion ($26.3 billion) for the year to March, up slightly from £20.7 billion in the previous year. The firm’s profit after tax, however, slumped 55% to £855 million compared to the prior year.

The firm is now targeting a further £3 billion in cost savings by the end of the full-year 2029.

“As we move into the next phase of BT Group’s transformation, we are sharpening our focus to be better for our customers and the country, by accelerating the modernisation of our operations, and by exploring options to optimise our global business,” Kirkby said.

BT is looking to simplify the company as part of the next phase of its transformation program. By accelerating the modernization of its operations the company hopes to “well positioned to generate significant growth for all our stakeholders,” said Kirkby.

She stepped into the role of CEO at the beginning of February, taking over from Philip Jansen.

BT announced last year that it planned to cut between 40,000 and 55,000 jobs by 2030, representing a 31% to 42% reduction in its workforce.

At the time, Jansen said in a statement that “by continuing to build and connect like fury, digitise the way we work and simplify our structure, by the end of the 2020s BT Group will rely on a much smaller workforce and a significantly reduced cost base.”

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