On Thursday, BT shareholders cheered positive developments in profitability as the group took action on costs.
BT Group shares surged over 8% on Thursday and were trading at 120p at the time of writing.
In the context of recent disappointing earnings updates, BT delivered solid financial performance, with adjusted earnings per share showing a 3% increase to 10.3p.
BT’s reported profit before tax was £1.1bn, up 29% largely as a result of cost-cutting measures. Revenue for the period was nearly exactly the same as the prior year’s £10.4bn.
Despite an increase in profitability, the board declared an interim dividend of 2.31 pence per share, in line with last year’s payout.
From an operational standpoint, the rollout of fibre has secured 364,000 net new customers in Q2 and ‘New EE’ was launched to attract new customers.
According to Matt Britzman, equity analyst at Hargreaves Lansdown, “BT’s consumer rebrand is now fully underway with an increased focus on converged products and services. There’s value in the facelift, mainly due to increased cross-selling and bundling within the consumer division.
“Figuring out how to deliver consistent growth is going to be the biggest challenge. Some serious cost-cutting efforts are underway, and as the buildout of 5G and fibre gets closer to its end, there should be a more normalised spending pattern on the horizon.”
“Given the pressure shares have been under of late, investors should be relatively happy with this print,” he inferred.