BT share price: Telco signals it might trim dividend

on Jul 11, 2019
Updated: Mar 11, 2020
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BT share price: Telco signals it might trim dividend

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BT Group (LON:BT.A) has signalled it would consider cutting its dividend in future, the Financial Times has reported. The comments came at the former telecom monopoly’s annual general meeting (AGM) yesterday.

BT’s share price fell in the previous session, giving up 1.79 percent to close at 192.38p, underperforming the broader UK market, with the benchmark FTSE 100 index shedding 5.78 points to end trading 0.08 percent lower at 7,530.69. The telco’s shares have given up more than 15 percent of their value over the past year, as compared with less than a one-percent fall in the Footsie.

BT signals it might trim dividend

The FT reported yesterday that BT’s chairman Jan du Plessis had told investors at the telco’s AGM that while the company was confident it could meet this year’s dividend payment, a “year or two in the future” the FTSE 100 group “will also consider reducing the dividend” as one way of funding its plans to connect 15m homes to full fibre broadband by the middle of the next decade.

He noted that BT would also consider funding the project by reducing capital expenditure, cutting costs and borrowing more.

The AGM comes after the former telecom monopoly revealed in May that its revenue had fallen in the year to March 31. The company, however, maintained its payout to shareholders and said at the time that it expected to hold the dividend unchanged in the new financial year.

Analysts on blue-chip telco group

Credit Suisse, which rates the former telecom monopoly as a ‘buy,’ set a target on the BT share price of 280p yesterday, while earlier this month, UBS reaffirmed its ‘neutral’ stance on the company without specifying a valuation on the stock. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 268.33p.

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