BT Group boosts cost-saving target as inflation bites

3rd Nov 2022 07:06

(Sharecast News) - BT Group is seeking a further £500m of savings after being hit by surging inflation, including higher energy prices, the telecoms specialist confirmed on Thursday.

Posting interim numbers, BT said its financial performance remained on track, despite "turbulent" conditions.

Revenues in the six months to 30 September came in at £10.37m, a 1% improvement, with growth in its consumer and Openreach divisions partially offset by legacy declines in large corporate customers in the enterprise unit.

Adjusted earnings before interest, tax, depreciation and amortisation rose 3% to £3.87bn, boosted by revenue growth and strong cost control, but pre-tax profits fell 18% to £831m, because of depreciation from network build as well as higher costs.

Philip Jansen, chief executive, said: "BT remains on the front foot in these turbulent times. Our strategy is work, we're executing against our plan and we're confident that we'll deliver our long-term ambition."

But he added: "Given the current high inflationary environment, including significantly increased energy prices, we need to take additional action on our costs to maintain the cash needed to support our network investments.

"As a result, we are increasing our cost savings target from £2.5bn to £3.0bn by the end of the 2025 full year."

BT did not immediate detail how or where the additional cost savings would be made.

The group has delivered cost savings of £1.7bn since April 2020, with a total cost to achieve of £0.9bn. The increased 2025 target will cost £1.6bn.