The telco has however set out ambitious targets around its FTTP rollout
BT has announced that it has axed its dividend scheme until 2022 following a difficult coronavirus-hit first quarter.
The telecoms firm revealed pre-tax profits dropped 12 per cent during the first quarter to £2.3 billion, while reported revenue dropped two per cent to £22.9 billion.
This has seen BT suspend dividends for 2019/20 and all dividends for 2020/21.
These dividends are expected to resume at 7.7 pence per share by BT, considerably lower than the 15.4 pence paid in the previous dividend.
BT also revealed that it won’t be providing a financial outlook statement for 2020/21 due to the uncertainty caused by Covid-19.
“Of course, Covid-19 is affecting our business, but the full impact will only become clearer as the economic consequences unfold over the next 12 months,” said BT chief executive Philip Jansen.
As BT chairman Jan du Plessis called the decision to suspend dividends “exceptionally difficult”.
In a statement du Plessis said: “Recognising the importance of dividends to our shareholders, the Board’s decision in relation to the dividend has been exceptionally difficult. BT plays a key role in sustaining critical national infrastructure – as magnified by the Covid-19 crisis – and many stakeholders trust and rely on the connectivity we provide.”
FTTP and 5G investment
In the latest financial report, BT revealed that it has also updated its FTTP target to 20 million premises by the mid-to-late 2020s.
To date 2.6 million premises has been passed, with 1.3 million added last year at a rate of 32,000 per week.
While BT has also expanded its 5G rollout to more than 80 towns and cities across the UK.
And mobile churn improved to 1.1 per cent for Q1, with fixed churn up 1.3 per cent year-on-year.
Jansen added: “Today we are announcing a rapid acceleration of our FTTP build with a target of 20 million premises passed by the mid- to late-2020s, including a significant build in rural areas.
“After passing 1.3 million premises last year, we are aiming at over 2 million in 2020/21, and envisage a maximum build rate of three million premises per year.”
Jansen adds that the investment in 5G and FTTP will significantly help BT overcome potential consequences from Covid-19.
“In order to deal with the potential consequences of Covid-19, allow us to invest in FTTP and 5G, and to fund the major 5-year modernisation programme, we have also taken the difficult decision to suspend the dividend until 2022 and re-base thereafter.
“These decisions, particularly on the dividend, network investment and transformation are key to underpinning BT’s investment case; driving network strength, competitive strength and financial strength, providing more clarity to the market, and driving long-term value for shareholders. I am confident that these decisions position us really positively for the future.”