London, June 29, 2026, 15:02 BST
- BT traded little changed at 195.10p at 1501 BST, after earlier reaching 199.65p. FTSE 100 slipped 0.06%.
- BT’s revised FY27 outlook pulls almost £1.9 billion in revenue but trims the EBITDA midpoint by just around £100 million.
- Verizon’s $625 million payment comes to around £472 million using Monday’s GBP/USD rate, equal to about 2.4% of BT’s net debt forecast for FY26.
BT Group plc (LON:BT.A) pared most of an early move higher Monday after the Verizon tie-up landed as more of a revenue shift than a cash boost. Shares at 1501 BST traded at 195.10 pence, up just 0.05%. The high for the session was 199.65p. The FTSE 100 Index (INDEXFTSE:UKX) slipped 0.06% to 10,501.74 a little before 1500 BST. Trading ran as normal on June 29, with LSE cash hours from 0800 to 1630 BST.
BT and Verizon Communications Inc NYSE:VZ will merge their international enterprise businesses into a 50:50 joint venture serving over 3,000 clients across more than 180 countries. The venture targets around $4 billion in yearly revenue. Verizon will make a $625 million equalisation payment to BT. Closing is aimed for 2027, pending regulatory nods and workforce consultations as needed.
BT boss Allison Kirkby called it a “very fragmented market” in comments to Reuters, adding the venture might “bring in third parties” down the line. In a company statement, Verizon’s Dan Schulman said the deal was “the clear answer” for customers who want cross-border cloud services. Reuters
BT changed its accounting for International, now classing it as a discontinued operation until the deal finishes. The group’s FY27 view drops International from the outlook. The revenue target comes down by nearly 10% at the midpoint, but the cash flow outlook stays the same.
| BT FY27 outlook | Old guide, incl. International | New guide, excl. International | Midpoint change |
|---|---|---|---|
| Adjusted group revenue | £19.0-£19.5 bln | £17.1-£17.6 bln | Down £1.90 bln, or 9.9% |
| Adjusted UK service revenue | £15.1-£15.4 bln | £15.1-£15.4 bln | No change |
| Adjusted EBITDA | £8.2-£8.3 bln | £8.1-£8.2 bln | Lower by £0.10 bln, off 1.2% |
| Capex excl. spectrum | c. £4.3 bln | £4.2-£4.3 bln | Roughly -£0.05 bln |
| Normalised free cash flow | c. £2.0 bln | c. £2.0 bln | No change |
| Dividend | Low-to-mid single digit growth | Low-to-mid single digit growth | No change |
The stock’s deal pop didn’t last. BT is cutting out low-margin sales, but it isn’t lifting its free-cash-flow target. The updated midpoint for continuing ops now points to an adjusted EBITDA margin near 47%, up from about 43% in the old group outlook.
| Investor read-through | Calculation | Result |
|---|---|---|
| BT International is forecast to have a 5.9% margin in FY27, based on consensus | £108 mln EBITDA / £1.821 bln revenue | 5.9% |
| BT’s FY27 guide for the main business points to a 47.0% margin | £8.15 bln EBITDA / £17.35 bln revenue | 47.0% |
| Verizon’s $625 mln payment, converted at $1.3241 to the pound | $625 mln / $1.3241 per £ | About £472 mln |
| This payment is about 2.4% of BT’s forecast FY26 net debt | £472 mln / £19.966 bln | 2.4% |
| And also works out at 2.4% of BT’s current market cap | £472 mln / £19.51 bln | 2.4% |
BT’s £472 million payment is small beside its £20.0 billion net debt for FY26. The company also posted normalised free cash flow at £1.51 billion. The cash could go toward cutting debt after venture funding, but it won’t change leverage on its own.
BT’s full-year results brought UK fibre shares into focus again. Openreach had passed 23 million homes and businesses with full fibre as of March 31, and reported 8.8 million connected, with take-up above 38%. BT said it now expects Openreach broadband line losses of about 800,000 in FY27.
Reuters Breakingviews reported that analysts at New Street Research estimate the deal values BT’s international business at close to 12x EBITDA. Based on BT’s own FY27 International EBITDA consensus of £108 million, that gets to around £1.3 billion for the asset, or roughly 7% of BT’s market cap as of Monday.
BT said its international businesses will keep running independently until the deal is done. The company stuck with its mid-term outlook for normalised free cash flow of around £3.0 billion by decade’s end and said it expects to grow its dividend up to the point where its credit metrics line up with a BBB+ rating.
