BT Group (BT-A.L) shares plunged 6% Thursday morning after the British telecommunications giant cut its revenue forecast for fiscal 2025, weighed down by a year-over-year drop in its first-half revenue and profit. The group now expects full-year revenue to decline between 1% and 2%, a downgrade from its previous outlook of flat to 1% growth in adjusted revenue.
The lowered forecast reflects a weaker performance in non-UK markets, driven by reduced low-margin kit sales and a challenging environment across corporate and public sectors. BT reiterated the rest of its outlook for fiscal 2025, including an adjusted EBITDA target of around 8.2 billion pounds, a capital expenditure projected of under 4.8 billion pounds and a normalized free cash flow of 1.5 billion pounds. For the six months ended Sept.
30, BT posted a profit of 755 million pounds, down from 844 million pounds a year earlier. Revenue slipped to 10.12 billion pounds from 10.41 billion pounds, as the company faced pressures from higher specific costs and rising net finance expenses, which were partially offset by reduced reported operating costs. BT's divisional performance was mixed, with Openreach benefiting from price increases, Ethernet base expansion, and stronger fiber-to-the-premises volume and mix during the first half.
In contrast, adjusted revenue in the consumer and business units declined 1% and 6% to 4.84 billion pounds and 3.87 billion pounds, respectively. Meanwhile, the board hiked the interim dividend to 0.024 pound per share from 0.0231 pound per share a year ago, with payment scheduled for Feb. 5, 2025, to shareholders on record Dec.
27, 2024. "We have accelerated the modernisation of BT Group in the first half of the year. We've ramped up our full fibre build and connections, seen further improvements in customer satisfaction, and our cost transformation contributed to growth in EBITDA and normalised free cash flow despite revenue declines driven by our non-UK operations and a competitive retail environment," Chief Executive Allison Kirkby commented..