This Morning’s Winner: BT Group plc Posts Strong Results

BT Group plc (LON:BT.A) lifts its full-year dividend by 15%, and expects to increase it by 10-15% for the next two years.

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BTBT Group (LSE: BT-A) (NYSE: BT.US) was one of the FTSE 100 winners in early trade this morning, lifting 3.5% following fourth quarter and full-year results to 31 March 2014.

Hark back to a year ago and you would have found many commentators concerned over BT’s foray into sports coverage, but the numbers don’t lie as the proposition helped the group deliver a record 9% growth in Q4 revenue for the BT Consumer division. Chief executive Gavin Patterson also noted the “excellent 79% share of broadband market net additions in the quarter”.

Away from the UK, BT Global delivered “a 9% increase in its order intake this year and continued to see double-digit revenue increases in the high-growth regions of the world”, according to Patterson, who stated that the group’s cost-transformation programmes are helping to drive BT’s strong cash flow.

Across the group as a whole, underlying revenue increased by 1.2% in the fourth quarter, which helped contribute to a full-year rise of 0.5%, beating market expectations as a result. Adjusted pre-tax profit performed well, too — lifting 9% in Q4 and 6% for FY2014 — leading to adjusted earnings per share increasing by 7% for the full year.

BT shareholders will be delighted with double-digit growth in the full year dividend as well, a proposed increase of 15% contributing to an expected 10.9p dividend, putting the company on a forecast yield of 3.3%. What’s more, BT expects to continue increasing its dividend by 10-15% for each of the next two years, which has caused many income investors to come flocking to the stock.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Sam does not own shares in BT.

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