BT Group PLC (GB:BT.A) remains upbeat about its annual outlook after reporting strong performance in the first half of FY24. The company posted a growth of 29% in its pre-tax profits to £1.1 billion, driven by its efficient cost savings. For the full year, the company anticipates an increase in adjusted revenue and earnings. Further, it expects normalized free cash flow to be near the upper limit of the £1 billion to £1.2 billion range.
BT Group is the biggest telecommunications company in the UK, with operations in 180 countries worldwide.
In the first six months, the company’s turnover increased by 3%, reaching £10.4 billion, driven by higher prices and sales of fibre-enabled products. However, it lost around 129,000 broadband customers in the second quarter, which was higher than the previous quarter’s loss of 126,000 customers.
The company also declared an interim dividend of 2.31p per share, which was in sync with its payout policy of distributing 30% of the prior year’s full-year dividend.
Cost Savings on Track
During its results, the company stated that its “cost transformation is on track,” with gross annualized savings of £2.5 billion achieved since April 2020 against the target of £3 billion. Additionally, the company is targeting 55,000 job cuts by the end of 2030, which is equal to 40% of its global workforce.
The company is actively pursuing cost reduction strategies to secure adequate cash flow for financing its network investments. In its second quarter, BT successfully provided ultrafast full-fiber broadband to a record 860,000 premises. As a result, its FTTP network now encompasses 12 million buildings throughout the UK.
Is BT a Good Buy?
Post-results, the share went up by around 5% in early trading on Thursday but ultimately ended the day with a 1.46% decline.
According to TipRanks consensus, BT.A stock has received a Moderate Buy rating, based on two Buy and two Hold recommendations. The BT Group share price target is set at 166.67p, reflecting a 50% increase from the current trading level.
