Despite having faced “significant headwinds”, BT reported continued strong results for its 2023 fiscal year, but warned it would be making labour reductions in the tens of thousands as it continues its business transformation.
In its financial statement for the year to 31 March 2023, BT reported total revenues of £20.7bn, down 1% on an annual basis, driven by strong growth at the Openreach broadband division.
That said, growth in the latter case was more than offset by a decline in the other units. Earnings before interest, tax, depreciation and amortisation (EBITDA) totalled £7.9bn, up 5% compared with the end of the previous fiscal year due to growth in the Openreach and consumer business lines, offset by a decline in enterprise. Openreach revenue for the year amounted to £5.68bn, rising by 4%, with EBITDA climbing 8% on an annual basis to £3.45bn.
The enterprise business line generated £4.96bn for BT in the financial year, down 4% annually, with EBITDA plunging 15% to £1.39bn.
The two key drivers of the year for BT were strong growth in fibre-to-the-premises (FTTP) and 5G deployment. BT’s financial year 2023 build saw the company finish the year with an FTTP footprint of 10.3 million, up 43% annually, with a further six million where initial build is underway. Some 702,000 premises were passed in the fourth quarter of 2023, at an average build rate of 54,000 per week, reaching 41% of its target to reach 25 million premises with FTTP by the end of 2026.
Customer demand in Openreach for FTTP was said to be extremely strong, with orders in the 2023 financial year up by 70% year on year. Take-up grew to 30.4% with record net adds of 395,000 in the quarter and a base of 3.1 million. The fourth quarter of 2023 saw a record number of FTTP connections, up 50% year on year with a base now over 1.7 million.
In mobile, BT’s EE division ended with 8.6 million 5G connections, up 62% on the previous financial year. The EE 5G network now covers 68% of the UK population.
“We have delivered our outlook for FY23: this year we’ve grown both pro forma revenue and EBITDA for the first time in six years while navigating an extraordinary macroeconomic backdrop. Over the last four years, we have stuck firmly to our strategy and it’s working,” said chief executive Philip Jansen, commenting on the results.
“Openreach is competing strongly and it’s clear that customers love full-fibre. The Openreach board has reaffirmed its target to reach 25 million premises with FTTP by the end of 2026 and plans to accelerate take-up on the network. In consumer, we’re delivering for customers,” he added.
Yet as it was releasing the 2023 results, BT also gave notice of its ambition towards the end of the current decade, when its group will be transformed, “connecting for good” and leading nationwide next-generation networks with what it claims will be best-in-class customer service and solutions. In getting there, BT said that by financial years 2028 to 2030 it will have reduced its total labour resource from 130,000 to between 75,000 and 90,000.
By this time, BT said that it will have increased Openreach FTTP premises passed from 10.3 million to between 25 and 30 million, with take-up rising from 30% to between 40% and 55%. BT forecasts an increase in retail FTTP take-up from 1.8 million to between 6.5 and 8.5 million. At the same time, it predicts an increase in its 5G UK population coverage from 68.1% to over 98%, and 5G connections from 8.6 million to between 13 and 14.5 million.
