UK-based telecommunications company BT Group PLC ($GB:BT.A) yesterday reported lower revenues in its first quarter trading update for FY25. The company’s total revenue fell by 2% year-over-year to £5.05 billion, largely due to a 1% drop in the Consumer segment. This was attributed to a 0.3% decline in the total broadband customer base during the quarter. Following the update, BT shares gained 0.39% on Thursday.
BT Group will announce its first-quarter results for FY25 on August 2.
BT Group’s FTTP Growth on Track
BT Group’s fibre-to-the-premises (FTTP) rollout advanced rapidly in the last quarter, connecting over one million premises with an average build rate of 78,000 per week. This expansion brings BT’s high-speed, full-fibre internet coverage to 15 million premises, as the company moves toward its target of 25 million by 2026.
Overall, the FTTP growth was overshadowed by a revenue dip, which failed to match the pace of this record rollout.
Additionally, adjusted EBITDA rose by 1% to £2.1 billion, driven by cost transformation efforts, which were somewhat offset by a revenue decline. Meanwhile, reported pre-tax profit declined by 3% year-over-year to £520 million.
BT Group’s Outlook
Speaking of the outlook, BT Group stated that it remains on track to achieve its financial targets for FY25. The company targets a normalized free cash flow (NFCF) of £1.5 billion for FY25, compared to £1.28 billion in the last year. In the long term, the company aims to increase its NFCF to £2.0 billion by FY27 and to double it to £3 billion by the end of 2030.
In addition to higher cash flows, BT Group forecasts adjusted revenue growth of 0 to 1% for FY25. Adjusted EBITDA is projected to increase to £8.2 billion, up from £8.1 billion in FY24.
Is BT Group a Good Buy?
According to TipRanks consensus, BT.A stock has received a Strong Buy rating based on four Buys and one Hold recommendation. The BT Group share price target is set at 218p, reflecting a 56% increase from the current trading level.
