BT to reinstate dividend at 7.7p for the 2021/22 financial year
BT said on Wednesday that it plans to deliver 7,000 new jobs as it speeds up its roll-out of a nationwide net-generation broadband network to 25m homes by 2026.
This represents a significant increase on its previous target of 20m premises.
The FTSE 100 telecommunications company also reported a fall in its profit before tax to £1.8bn a year ago as firms used its services less during lockdowns.
BT has committed to spending £12bn to deal with the UK’s problem of falling behind the world in terms of the scale of its full-fibre broadband. The pledge is in line with the government’s promise to deliver nationwide “turbocharged” broadband to all homes in the UK.
“BT is already building more full-fibre broadband to homes and businesses than anyone else in the UK. It will get fibre to more people, including in rural communities. And it will help fuel UK economic recovery, with better connectivity and up to 7,000 new jobs,” said Philip Jansen, the chief executive of BT.
BT also said it will reinstate its dividend, which was stopped for two years at the outset of the pandemic. It will be 7.7p for the 2021/22 financial year.
Russ Mould, investment director at AJ Bell, unpacked BT’s results and its outlook.
“The company effectively has three significant drains on its financial resources. These are its substantial pension commitments, the rollout of fibre broadband and funding the acquisition of content rights for its BT Sport channel,” Mould said.
“The latest valuation of the pension reveals a massive deficit which will require hundreds of millions of pounds worth of funding every year.”
“The company’s net debt pile is also pretty eye-watering, and the surprise isn’t really that dividends remain off the table for now but that they are likely to come back in the current financial year. The UK’s new super deduction tax on capital expenditure is clearly doing a lot of the heavy lifting here.”