BT Boosts Shareholder Payouts Amid Global Unit Strategy Review
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BT Boosts Shareholder Payouts Amid Global Unit Strategy Review

16 May 2024
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BT Boosts Shareholder Payouts Amid Global Unit Strategy Review

BT CEO Eyes UK Focus

BT's new chief executive, Allison Kirkby, is exploring the possibility of selling the company's global business telecoms division to sharpen its focus on core operations in the UK. Kirkby revealed this strategy during BT's annual results announcement, indicating a potential shift in the company's international presence.

Kirkby highlighted that BT is actively seeking ways to "optimise" its global business unit, which currently serves customers across 180 countries with network, security, and cloud services. The division generates approximately £2.5 billion in revenues and £500 million in profits.

Furthermore, Kirkby emphasized the progress made in BT's Openreach division, noting that the spending peak for building its full fibre broadband network has passed. This achievement, coupled with successful cost-cutting measures and reorganization efforts ahead of schedule, positions BT with increased financial capacity.

With a positive free cash flow of £1.3 billion for the year ending March, exceeding expectations, Kirkby anticipates doubling this figure over the next five years. As a result, BT's final dividend has been raised by 5.6% to 5.7p per share, translating to a payout of approximately £560 million to shareholders.

Looking ahead, Kirkby hinted at future dividend increases, anticipating significant cash flow allocation in the latter part of the decade. This strategic shift is aimed at enhancing shareholder value and aligning BT's operations with its core strengths.

Victoria Scholar, head of investment at Interactive Investor, remarked that Kirkby's initiatives are aimed at boosting shareholder confidence and improving BT's share price performance through enhanced financial metrics and dividend payouts.

In summary, BT's consideration of divesting its global telecoms unit reflects a strategic focus on strengthening its position in the UK market while leveraging its financial strength to drive future growth and shareholder returns.

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