Telecoms group BT has suspended its dividend until 2021/22, and pulled its financial outlook in response to the Covid-19 pandemic.
The company said the cash saving would bolster it through the expected financial crash that will lead to lower revenue from sports customers, reduced business activity and more cautious spending from multinational customers.
On the same day that rivals Telefonica and Liberty Global announced the merger of their British units to build a stronger challenger, BT also set out plans for a new five-year programme to modernise the business.
The new programme will cost £1.3 billion to achieve, and will deliver annualised gross benefits of £2 billion by March 2025, as it switches off many legacy programmes and uses new technologies to improve.
"Of course Covid-19 is affecting our business, but the full impact will only become clearer as the economic consequences unfold over the next 12 months," said chief executive Philip Jansen. "Due to Covid-19, BT is not providing guidance for 2020/21, at this time."
It said it expected to resume dividend payments at 7.7 pence per share. In 2018/19 it paid a full-year dividend of 15.4 pence.
Mr Jansen has been tasked with building nationwide gigabit fixed and mobile networks for the future while trying to shore up revenue and earnings in the short term.
The company said on Thursday it was working to build its fibre to the home network to 20 million premises by mid- to late-2020s, on the assumption that it secures the right regulatory approval.
It said its 2019/20 results were in line with expectations. – Reuters
