BT’s (BT.A) mixed results come as no surprise to the market

As BT updates the market, Helal Miah, investment research analyst at The Share Centre, explains what it means for investors.

Article updated: 9 May 2019 1:00pm Author: Helal Miah

  • Pre-tax profits rise by 2% due to cost cutting measures delivering £875mn of savings
  • Dividend maintained at impressive yield of just under 7%
  • The group is yet to overcome significant challenges so we maintain our ‘hold’ recommendation for investors with a medium risk appetite


BT has reported an unsurprising full year set of results this morning, with revenues of £23.4bn, down 1%, and profits before taxes rising by 2% to £2.67bn. This was boosted by cost cutting measures delivering annualised savings of £875mn. However, net cash from operating activities declined 14% as the group made significant contributions to its workplace pension scheme. Its consumer division continues to flourish but is offset by the more challenging environment faced by its Enterprise and Global Services businesses.

Structural changes have been in abundance in recent years and the new CEO, Phillip Jansen’s tone in the release suggests a lot of work is still needed. He repeated the need of continued investment into several aspects of the business to remain competitive in a challenging and regulated market. Furthermore they will have to contend with the high level of debt to try and plug the pension deficit.


Our View on BT - Hold

Investors seemed to welcome the news of the dividend being maintained at an impressive yield of just below 7%. The shares are languishing at less than half of what they were back in 2016 and trade at rather attractive valuation. This coupled with the high dividend yield will appeal to contrarian value and income investors. However, we still take the view that there are significant challenges the group must overcome and therefore continue with our medium risk ‘Hold’ recommendation.

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All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Helal Miah portrait photo
Helal Miah

Investment Research Analyst

After graduating with an economics degree from University College London, Helal started his career within private banking at Smith & Williamson Investment Management and later held analyst and fund manager roles with the Industrial Bank of Japan, Schroders and Mitsubishi Corporation. He is a chartered fellow of the Chartered Institute for Securities & Investment.