BT’s CEO says she ‘loves to squeeze’ short sellers while unveiling £3bn of cost cuts

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BT’s new chief executive Allison Kirkby said “I always love to squeeze the shorts . . . and prove them wrong” as she laid out her plans to turn around the UK telecoms group, sending shares up by almost 13 per cent.

Kirkby made the remark after the Financial Times earlier this week revealed investors had placed a record £300mn bet against the FTSE 100 company. She announced on Thursday that BT would cut another £3bn of costs and increase its dividend, and added that having a new chief executive who had not yet unveiled a strategy had encouraged shorting.

“I’m hoping now that we’ve set out a very transparent, multiyear and confident plan that some of those shorts will start to diminish,” Kirkby told the FT.

Kirkby, who took over BT in February, said the group had hit an original £3bn target for gross annualised cost savings a year ahead of schedule, and announced a new target of the same size to be reached by the end of its 2029 financial year.

BT shares were up over 13 per cent to 127.9p in morning trading on Thursday.

The company’s reported operating costs were £18.6bn in the year to March 31. Kirkby told journalists that the additional cost-savings programme would focus on the continuing shutdown of legacy networks and migration of customers to next-generation networks, simplifying products, platforms and processes and using new digital and artificial intelligence platforms.

Line chart of Share price, pence showing BT shares jumped as the company unveiled its cost-cutting measures

She said there was no change to the previously announced target to cut up to 42 per cent of the group’s workforce by the end of the decade.

The comments came as the telecoms group reported results for the year to March. BT declared a final dividend of 5.69p a share, bringing the full-year dividend to 8p, up from 7.7p last year.

Kirkby said BT had “reached the inflection point on our long-term strategy”. She added that it would focus on the UK and was “exploring options to optimise our global business”, including exiting some markets. The group provides products and services in about 180 countries.

Kirkby added that BT had passed peak capital expenditure on its rollout of full fibre broadband across the country, helping it raise its cash flow guidance.

The group expects to reach normalised free cash flow of about £1.5bn in its 2025 financial year, up from £1.3bn in the year just ended, and about £3bn by the end of the decade. It expects adjusted revenue growth of between zero and 1 per cent in the current year and earnings before interest, taxes, depreciation and amortisation of £8.2bn, up from £8.1bn in the year just ended.

Karen Egan, head of telecoms at Enders Analysis, said the decision to increase the dividend and clearly define cash flow expectations helped to “shore up confidence” in the cash flow recovery and “assuage the doubters”.

However, BT warned it could face further broadband losses to competitors, after losing 491,000 customers for the full year, if the market remained weak.

The group’s business division, which was created from a merger of its global and enterprise units in 2022, reported a decline in annual adjusted revenue and ebitda. The company has taken a £488mn goodwill impairment charge on the operation, “reflecting a decline in profitability in recent years”.

This contributed to the 31 per cent fall in group pre-tax profits to £1.2bn.

BT also announced a delay to its public switched telephone network turn-off, an industry-led initiative to transition to a digital phone system, from the end of 2025 to the end of January 2027 following a pause in non-voluntary migrations across the sector.

The FT last month revealed two Virgin Media O2 customers had died following the failure of their telecare devices after the upgrade process, which prompted a government announcement in December that it had secured industry commitments to protect vulnerable customers.

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