Thursday 05 May 2016 7:45 am

BT pledges double-digit dividends until 2018 as full year profits and revenues climb

Revenues and profits at BT have risen during a "landmark year" for the business – the best performance in seven years – and pledged double-digit dividends as far as 2018.

Investors were pleased with the news: BT's share price was up 3.2 per cent in early trading.

The figures

Revenues for the full year climbed six per cent to £18.9bn, with adjusted pre-tax profit uip nine per cent to £3.47bn. On a reported basis, they rose 15 per cent £3.03bn.

EBITDA was up five per cent to £6.58bn while earnings per share were up five per cent to 33.2p. As a result of the figures, BT is recommending a dividend of 14p per share – up 13 per cent on last year.

The figures include EE – which BT bought in a £12.5bn deal earlier this year – from 29 January.

Why it's interesting

BT has recorded strong results and while some industries are suffering from uncertainty over the wider environment, the telecoms giant appears to be suffering from no such concerns.

During the current financial year, BT expects EBITDA to jump 20 per cent to around £7.9bn, with revenues up and normalised free cash flow of between £3.1bn and £3.2bn.

Dividends will be up 10 per cent in both 2016/17 and 2017/18, the group also forecast.

What BT said

Chief executive Gavin Patterson heralded the "landmark year", and revealed plans to launch a multi-billion pound investment into the UK's fibre and 4G reach.

"We won't stop there," he added. "The UK is a digital leader and our investment in ultrafast broadband will help it stay ahead.

"The integration of EE is going well and we now see the opportunity to deliver more synergies than we originally expected, and at a lower cost. And we're reorganising our business to better serve customers both in the UK and internationally.

"Customers are benefiting from our investments but we plan to do more when it comes to service, to meet customers' rising expectations… Our results and the investments we're making position us well to continue to grow in the coming years. In light of our confidence we are setting out financial and dividend guidance for the next two years."