BT Group is at a pivotal moment in its long-running turnaround strategy, with CEO Allison Kirkby striving to convince investors that substantial spending on its fiber network will ultimately lead to stronger cash generation. The company has reaffirmed its guidance for around £2 billion in free cash flow this year and £3 billion by the end of the decade. Despite these targets, BT is forecasting declining revenues for 2027, missing analyst estimates, and continues to face a highly competitive UK broadband market, which is seeing a rise in alternative providers.
For the financial year ending March 31, 2026, BT reported revenues of £19.7 billion, a 3% decrease from the previous year, with adjusted revenue down 4% to £19.6 billion. This decline was attributed to lower international revenue, handset trading, and adjusted UK service revenue, though it was partially offset by price increases and an improved fiber-to-the-premises (FTTP) mix. Despite these revenue challenges, the company achieved an 8% increase in reported profit before tax, reaching £1.4 billion, driven by lower specific items and depreciation. BT also realized £580 million in gross annualised cost savings during the year, contributing to total savings of £1.5 billion over two years, and has extended its overall transformation plan target to £3.7 billion by 2030.
BT's Openreach division saw record FTTP build, passing 4.8 million premises and bringing its total FTTP footprint to 23 million premises, on track to reach 25 million by December 2026. This led to strong customer demand, with 2.2 million net FTTP additions and an average revenue per user increase of 4% to £16.7. However, the company continues to battle customer losses, expecting to shed around 800,000 broadband lines in the upcoming financial year, after losing 825,000 in the prior year. Analyst firm UBS has expressed skepticism about BT's ability to hit its £3 billion free cash flow target by 2030, forecasting only £2 billion, citing persistent revenue declines and intense competition from alternative networks offering 20-30% cheaper wholesale pricing. UBS also predicts Openreach will lose 800,000 broadband lines annually over the next two years, with its market share falling from 60% to 50%.
