BT's shares rallied to a five-year high on Thursday following a better-than-expected profit report, adding to investor optimism that the UK's largest broadband provider is approaching a "show me the money" moment after years of heavy investment. The FTSE 100 group's shares rose 4 percent in morning trading after reporting adjusted earnings before interest, depreciation and amortization of £2.1 billion for the three months to September 30, slightly above analyst estimates of £2 billion. Andrew Lee, a Goldman Sachs analyst, cited improving profitability from Openreach, BT's fibre network, as a key reason for renewed investor optimism driving a 25 percent rally in BT shares over the past five weeks.
BT has committed £15 billion to upgrading Openreach to serve 25 million homes with full-fibre broadband by the end of 2026. "Investors can sense we're nearing the 'show me the money' moment," Lee stated. A series of recent developments has helped cement BT's position as the UK's leading broadband provider. The company, led by chief executive Allison Kirkby, recently acquired struggling rival TalkTalk, which serves 1.5 million consumers, through a pre-pack administration after the government invoked powers to override antitrust concerns.
Meanwhile, Virgin Media O2 faces pressure to cut investments to help service its £22 billion debt pile. VMO2 has also halted its network build and entered talks with BT over a deal to use its Openreach fibre network in areas it does not currently service. Karen Egan, head of telecoms at Enders Analysis, said investors had been buoyed by Kirkby's commitment to delivering £2 billion in normalized free cash in fiscal year 2027, with £3 billion by the end of the decade. "The market had been sceptical that BT could deliver on its cash flow recovery plans in such a tough environment, but its razor-sharp focus on operational delivery in the challenging UK market is really paying off," she said.".
Source: Financial Times Companies · Summarized by HeadlinesBriefing