Philip Jansen, Chief Executive, commenting on the results, said: “These results show that BT Group is delivering and on target: we’re rapidly building and connecting customers to our next generation networks, we’re simplifying our products and services, and we’re now seeing predictable and consistent revenue and EBITDA growth.

“We’ve strengthened our competitive position with the launch of both New EE and our renewed strategy in Business, and Openreach has now built full fibre broadband to more than a third of the UK's homes and businesses with a growing connection rate. Our transformation programme has now delivered £2.5bn in annualised savings,  well on track to meet our £3bn savings target by FY25.

“Our delivery in the first half means we are confirming our financial outlook for FY24 with normalised free cash flow now expected towards the top end of the guidance range, and we are declaring an interim dividend of 2.31 pence per share.  BT Group has a bright future and I’m pleased to be handing the baton to Allison Kirkby early in the new year. She knows the sector, she knows the company and she’s the right person to lead BT Group from this position of operational strength.” 

Continued strong execution of our strategy

• FTTP build rate accelerated to 66k per week delivering a record of 860k premises passed in the quarter, FTTP footprint is now expanded to 12m premises with a further 6m where initial build is underway
• Strong customer demand in Openreach for FTTP with net adds of 364k in Q2, bringing take-up rate to 33%
• Openreach broadband ARPU grew by 10% year-on-year due to price rises and increased volumes of FTTP; Openreach broadband line losses of 255k in H1, a 1% decline in the broadband base; whilst we continue to target a decline of around 400k in FY24, softer market conditions increase the risk that losses will be above this level
• Consumer broadband ARPU for the year to date increased 4% year-on-year and Consumer postpaid mobile ARPU for the year to date increased 9% year-on-year; churn for the year to date remains stable for both broadband and postpaid mobile at 1.1% and 1.0% respectively
• In October 'New EE' was launched  with a modern digital platform and a set of converged products and services
• Retail FTTP base grew year-on-year by 48% to 2.2m of which Consumer 2.1m and Business 0.1m; 5G base 9.9m, up 42% year-on-year
• Cost transformation on track with gross annualised cost savings of £2.5bn since April 2020 against our £3bn target, with a cost to achieve of £1.3bn against a target of £1.6bn
• Continued focus on creating standout customer experiences with BT Group NPS of 22.7, up 1.8pts year-on-year

Adjusted¹ Revenue and EBITDA growth:

• Reported revenue £10.4bn, in line with the prior year; adjusted¹ revenue £10.4bn, up 3% on a pro forma² basis due to increased fibre-enabled product sales, inflation-linked pricing and improved lower margin trading in Business partially offset  by legacy product declines
• Adjusted¹ EBITDA £4.1bn, up 6%; and up 4% on a pro forma² basis with revenue flow through and strong cost control more than offsetting cost inflation and one-off items in the prior year; Business EBITDA decline due to increased input costs and legacy high-margin managed contract declines
• Reported profit before tax £1.1bn, up 29% largely due to factors driving adjusted¹ EBITDA growth
• Reported capital expenditure ('capex') £2.3bn, down 11% with lower fixed network spend driven by lower FTTP build unit costs; cash capex of £2.5bn also  down 11%
• Net cash inflow from operating activities £2.3bn; normalised free cash flow¹ £0.5bn, up £0.4bn primarily due to £0.2bn increase in adjusted EBITDA¹ and £0.3bn decrease in cash capital expenditure partly offset by £(0.1)bn net working capital outflow; net working capital movements includes £359m from the sale of cash flows of contract assets relating to mobile handsets as well as £(220)m from lower utilisation of a supply chain financing programme
• Net debt £19.7bn, (31 March 2023: £18.9bn), increasing mainly due to pension scheme contributions with net free cash flow for the first half of FY24 substantially offsetting the payment for the final  dividend of FY23
• Gross IAS 19 deficit of £3.9bn, up from £3.1bn at 31 March 2023 mainly due to the increase in real interest rates and narrowing of credit spreads over H1, partly offset by deficit contributions
• Interim dividend for FY24 of 2.31 pence per share (pps) in line with our policy of paying 30% of prior year's full year dividend
• FY24 Outlook: Adjusted¹ revenue and EBITDA growth on a pro forma basis; capital expenditure excluding spectrum of around £5.0bn; normalised free cash flow towards the top end of £1.0bn-£1.2bn range.

Customer-facing unit updates

 
_{¹ See Glossary   
² See 'Prior period comparatives' section below for more information on pro forma and re-presented measures.  
³ Net debt was £18,859m at 31 March 2023}

Prior period comparatives

Throughout this release, comparative financial information for the half year to 30 September 2022 ('FY23') has been re-presented to reflect the merger of our Global and Enterprise business units to form Business; and the change in the methodology used to allocate shared Network, Digital and support function costs across our units, which improves the relevance of our financial reporting by better allocating internal costs to the drivers behind those costs. These adjustments are made pursuant to IFRS accounting requirements, for more information see note 1 to the condensed consolidated financial statements on page 15 .

In addition, the group and operating review sections of this release present comparative financial information for the Consumer customer-facing unit and BT Group overall on an unaudited 'pro forma' basis. This reflects adjustments that estimate the impact as if trading in relation to BT Sport has been equity accounted in FY23, akin to the Sports JV being in place historically. Analysis on a pro forma basis enables comparison of results on a like-for-like basis.

The Additional Information on page 29 presents a bridge between financial information for the half year to 30 September 2022 as published on 3 November 2022, and the comparatives presented in this release. For further information see bt.com/about for separate publications covering the formation of Business and cost allocation changes, (published 27 June 2023), and the pro forma adjustments (published 18 October 2022).

Forward-looking statements – caution advised

Certain information included in this announcement is forward looking and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward looking statements. Forward looking statements cover all matters which are not historical facts and include, without limitation, projections relating to results of operations and financial conditions and the Company’s plans and objectives for future operations. Forward looking statements can be identified by the use of forward looking terminology, including terms such as ‘believes’, ‘estimates’, ‘anticipates’, ‘expects’, ‘forecasts’, ‘intends’, ‘plans’, ‘projects’, ‘goal’, ‘target’, ‘aim’, ‘may’, ‘will’, ‘would’, ‘could’ or ‘should’ or, in each case, their negative or other variations or comparable terminology. Forward looking statements in this announcement are not guarantees of future performance. All forward looking statements in this announcement are based upon information known to the Company on the date of this announcement. Accordingly, no assurance can be given that any particular expectation will be met and readers are cautioned not to place undue reliance on forward looking statements, which speak only at their respective dates. Additionally, forward looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority), the Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. Nothing in this announcement shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.