BT has reported a notable decline in its first-quarter revenue, causing an immediate impact on its stock price. The telecom giant continues to face challenges from diminishing legacy contracts and low-margin sales.
BT’s first-quarter revenue was reported at £5.05 billion, marking a two per cent decrease compared to the same period in 2023. This decline fell short of market expectations, leading to a 3.9 per cent decrease in the share price at opening. The primary factors for this decline included reduced legacy contracts and lower-margin sales.
Despite the revenue decline, BT managed to achieve a one per cent increase in adjusted EBITDA to £2.06 billion, primarily through stringent cost controls. These controls included reduced staff costs, which played a significant role in offsetting the revenue shortfall. Profit before tax, however, decreased by three per cent to £520 million due to the revenue decline.
BT has announced a record fibre build, passing over one million premises in the quarter, thus enhancing its total footprint to 15 million, including 4.2 million rural sites. Equity Research Analyst Matt Dorset commented positively on the progress, stating, “The fibre rollout is progressing well.”
However, Openreach line losses were noted to be slightly higher than expected at 196,000. Competitive pressures and a weakening broadband market were identified as contributing factors. Dorset further commented, “Government growth policies and the construction revolution are likely to benefit BT by increasing the number of homes eligible for broadband connections.”
BT’s CEO, Allison Kirkby, expressed confidence in a strategic direction aimed at reducing costs by £3 billion by the end of 2029. Kirkby reiterated the company’s financial guidance for the full year 2025, projecting revenue growth between zero to one per cent, EBITDA of around £8.2 billion, and a free cash flow of £1.5 billion. She emphasised modernising BT’s portfolio and operations.
Major shareholder Patrick Drahi, through his telecom group Altice, bolstered his stake in BT by utilising a £1.5 billion margin loan. In addition, Carlos Slim acquired a 3.2 per cent stake, signifying a potential vote of confidence in BT’s growth prospects. The stock experienced nearly a 12 per cent rise year to date.
BT remains committed to enhancing its infrastructure and reducing operational costs despite current challenges. Continued investment in fibre technology and strategic stakeholder interest could support long-term stability.
