BT reported revenue of £19.7bn, down 3%, while adjusted revenue fell 4% to £19.6bn. Adjusted EBITDA, a rough measure of operating profit before depreciation and financing costs, was almost unchanged at £8.23bn. Reported pre-tax profit rose 8% to £1.44bn, helped by lower specific charges and depreciation, though adjusted earnings per share fell 3%. Normalised free cash flow slipped 6% to £1.51bn, mainly because capital spending and interest costs were higher.
BT is a reminder that profit and cash are not the same thing. The company can report higher statutory profit while still producing less free cash if it is spending heavily on fibre, paying more interest or funding working-capital movements. BT's promise is that this phase is nearing its peak: it guides to normalised free cash flow of about £2bn in FY27 and £3bn by the end of the decade, with capital expenditure excluding spectrum expected to fall from £5.1bn to about £4.3bn next year.
The operating picture is more mixed. Openreach, BT's infrastructure arm, was the standout: revenue rose 1%, EBITDA rose 5%, and its full-fibre network reached about 23m premises, with a target of 25m by December 2026. Consumer revenues fell 2%, though BT added broadband, postpaid mobile and TV customers. Business revenue fell 2%, and International revenue dropped 15%, partly because of disposals.
From monopoly to regulated utility
BT owns infrastructure that is hard to replicate, but it does not enjoy monopoly freedom. Openreach, which was created in 2006 to run the access network used by many broadband providers, sells access to rivals as well as to BT's own retail brands, and regulators watch pricing and competition closely. Meanwhile, alternative fibre networks have pushed hard into Britain's broadband market, helping consumers but pressuring BT to build faster and accept line losses on older products. The latest release shows Openreach lost 825,000 broadband lines in the year, slightly better than company guidance, while full-fibre connections rose by 2.2m to 8.8m.
BT trades on roughly 5.1 times adjusted EBITDA and 2.1 times revenue. Those ratios look modest for a company with national infrastructure assets. But enterprise value includes debt, and BT's net debt was nearly £20.0bn.
The fairest reading is that BT has produced a disciplined, not dazzling, set of results. It is becoming a simpler, more infrastructure-heavy company, and the cash-flow story is becoming easier to see. But for shareholders, the burden of proof has merely shifted: BT no longer has to show that it can build the network, it has to show that the network can earn enough to justify the capital, the debt and the patience.
