BT full-year results: can the share price hold steady if the dividend is cut?

BT faces a tough few years ahead, but the opportunity to cut the dividend and save cash should be taken.

When are BT’s earnings published?

BT publishes full-year (FY) earnings on 7 May.

BT results: what does the City expect?

BT is expected to report revenue of £22.9 billion, down 2.3% for the year, while pre-tax profit of £2.8 billion is expected to be down 13.3% compared to a year earlier.

BT finds itself in the midst of a huge turnaround programme, and the situation has not been helped by the coronavirus pandemic. It is having to invest in new infrastructure to provide 5G networks while at the same time withdrawing from operations abroad to focus on the UK.

This greater pressure on cash flow, coupled with the dramatic fall in its share price since December (from 200p to 110p), has resulted in a surge in the dividend yield, to 13.5%. This in turn has prompted speculation that the group will cut back its dividend in order to conserve cash while managing to maintain a relatively high yield compared to the FTSE 100’s 4.1%.

How to trade BT’s earnings

BT shares slumped 8.5% the last time results were announced, in January 2020. Meanwhile, the share price’s 14-day average true range (ATR) has returned to more normal levels, with an average price range of 5p over the past fourteen days, compared to almost 10p in late March.

BT shares: technical analysis

BT shares have been an abysmal performer compared to the FTSE 100 since mid-2015, falling 75% compared to a 17% loss for the index. In the process, they have given back all gains since 2010. This trend looks unlikely to reverse.

Since mid-March the shares have continued to decline, reversing the initial bounce to 135p. While support continues to hold around 110p, trendline resistance from 135p has prevented further gains. A break higher targets 140p, while a daily close below 110p and then below the March low of 103p opens the path to more downside.

BT: hard-headed approach required

A dividend cut for BT makes sense at this point. It is hardly the only firm to be doing so, and with a yield solidly in double digits the firm has the room to reduce the payout. But the cash burn will go on, and with economic activity likely to remain weak there will little upside for the shares for the time being.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.