Shares in BT jump sharply as it resumes dividends

Shares in BT jumped sharply today after the group revealed it has started dishing out dividends to shareholders again after an 18-month hiatus. 

The company’s shares, which are listed on the FTSE 100 index, are currently up 6.05 per cent or 8.6p to 150.75p. A year ago the group’s share price was 99.42p. 

BT said it would pay investors 2.31p a share, adding that it plans to introduce further dividend payments in due course. 

The group previously scrapped its shareholder dividends to be able to fund its full fibre broadband rollout.       

Its decision comes as the telecoms giant revealed its Openreach full fibre broadband has now reached six million homes, costing between £250 and £350 per property.

BT said it had decided not to bring in a partner to help fund fibre to an additional  five million premises after a reduction in build costs and strong demand meant it stacked up for the company to invest all the money itself. 

BT added it has signed 10 communication providers who use Openreach, including Sky and TalkTalk, to its Equinox long-term full fibre pricing plan.

The details come as bosses revealed revenues in the six months to the end of September slipped 3 per cent to £10.3billion, with sales down in the Global division and the Enterprise wholesale business division.

Higher financing costs also hit profits, which dropped 5 per cent in the six-month period to £1billion, and the business said it was constrained by global supply chain issues hitting stock levels.

Boss Philip Jansen said: ‘These results demonstrate an acceleration of pace in the transformation of BT.

In charge: Philip Jansen is the chief executive of BT

‘We are creating a better BT for our customers, the country and our shareholders.

‘After a record six months, Openreach has now rolled out full fibre broadband to almost six million premises and continues to lower its build cost.

‘Its three largest customers are signed up to the new pricing offer as we see rapid adoption of what will be the UK’s first nationwide full fibre network spanning 25 million premises by 2026.’

He added that the company’s 5G network now covers over 40 per cent of the UK’s population and that BT has hit its £1billion cost savings target 18 months early.

Keith Bowman, investment analyst at Interactive Investor, said: ‘BT is today underlining its determination to become a more efficient and increasingly greater cash generative company.’

He added: ‘This all comes on the back of largely inline results and importantly for investors, the restarting if rebased dividend payment. 

‘On the downside, the competitive environment remains intense while shareholder returns, are at least for now, not what they were. On the upside, greater previous regulatory clarity has allowed BT to increase and accelerate its total Fibre-to-the-Premises (FTTP) build out. 

‘Speculative interest following a share stake ultimately taken by multibillionaire telecoms dealmaker Patrick Drahi back in June is not to be forgotten, with BT now building towards the potential for increased future shareholder returns. 

‘In all and given an undemanding valuation, analyst consensus opinion currently points towards a tentative buy”.’