BT's financials remain challenged, but well placed to beat away broadband challengers

5 February 2026

If you are covering BT's latest financial results, please find below a comment from Matt Dorset, equity research analyst at Quilter Cheviot:

"BT's latest results highlight its financials remain challenged, with its UK Service business revenue down 2% compared to last year, 0.5% behind expectations, albeit this is partly due to phasing of business revenues and some small disposals. Earnings were down 1% year-on-year and slightly ahead of expectations, with strong cost cutting continuing to largely offset revenue decline from legacy services and increased National Living Wage and National Insurance costs, including labour resource down 7% and energy usage down 6%.

"In the Consumer segment, BT's customer bases grew across both broadband and mobile for the fourth and third successive quarters respectively, and this segment remains on track for growth in the second half of the year. In Business, the transformation plan continues to progress with some weakness due to disposals which are now complete.

"Meanwhile, the Openreach fibre rollout continues at record pace with more than 1m homes passed in the quarter taking the footprint to more than 21.4m premises, and fibre net adds were up 21% to 571,000, continuing to demonstrate the strong demand for this product. Positively, broadband line losses were better than expected at 210,000, and BT has improved line loss guidance by 50,000 which may suggest some of the alternative internet providers are starting to lose momentum or there is some recovery in the wider broadband market.

"BT has reiterated all other full year and mid-term guidance, with cash flow to increase to £2bn next year and £3bn by the end of the decade. The valuation continues to remain attractive thanks to that fibre rollout and despite the recent rally in the shares, and with a significant cash flow inflection to come as capex peaks, BT looks well placed to weather its current challenges."