BT Sees Further Revenue Contraction Ahead as Weak Handset Sales, Divestments Drag Fiscal 2026 Topline
BT Group (BT-A.L) on Thursday projected a yearly decline in fiscal 2027 adjusted revenue after lower handset volumes and international divestments helped lead to a 3% drop in the top line for the 12 months ended March 31, 2026.The telecommunications company's revenue reached 19.65 billion pounds sterling in fiscal 2026, down year over year from 20.36 billion pounds a year ago. Adjusted revenue also decreased 4% to 19.65 billion pounds, compared with the group's guidance of 20 billion pounds.Aside from lower handset volumes and international divestments, BT Group also attributed the fall in revenue to lower equipment trading and UK service revenue, a decline in legacy products and managed contracts, and adverse foreign exchange.While the group reiterated its guidance for sustained growth in the medium term, it guided adjusted group revenue in fiscal 2027 between 19 billion pounds and 19.5 billion pounds. Adjusted EBITDA was forecast in the range of 8.2 billion pounds to 8.3 billion pounds.The board declared a final dividend of 0.0587 pound per share, higher than the payment of 0.0576 pound per share a year ago. The decision brought a 2% increase in the full-year dividend to 0.0832 pound per share and was accompanied with a commitment to raise the fiscal 2027 dividend by a low- to mid-single digit percent."FY27, revenues are projected to decrease by 2% while EBITDA is expected to grow by c.0.5% due to ongoing cost reductions. Although BT's extensive transformation plan, accompanying the final rollout of fibre in the UK, is anticipated to significantly reduce [operating expenditure] and [capital expenditure] from 2027, concerns remain about the lack of revenue growth. The FY27 dividend yield is 3.8%, which is relatively low compared to leading peers, given UK interest rates at 5%," AlphaValue/Baader Europe said, maintaining its sell recommendation for the stock.Shares were down over 2% in early morning trade.