BT’s shares rose by as much as 7% this morning as the firm’s annual results delivered a small increase in profit, despite the decline in revenue forecast by analysts. Gains later eased back towards 2%.

The telecoms giant delivered full-year revenue of £20.9 billion, a 2% decrease from the previous year, pointing to the challenges of “inflationary cost pressures, geopolitical uncertainty and an intensely competitive market environment”.

While revenue for the consumer division remained flat, there was a 5% and 10% revenue decrease in the enterprise (business) and global (security and networking) divisions respectively. However, there was better news for Openreach, which builds and maintains the telephone and broadband networks, achieving year-on-year revenue growth of 4%.

Average monthly revenue by customer for the fourth quarter fell across all categories, including fixed line, broadband and mobile. In the business division, the number of voice lines fell by nearly 12% compared to the same quarter in 2021.

However, BT achieved a 2% increase in adjusted EBITDA, mainly due to cost savings from its modernisation programmes, cost management and lower indirect commissions. It has now achieved gross annualised cost savings of £1.5 billion with a planned target of £2.5 billion by the end of 2025.

Openreach expansion

Openreach delivered a record fibre to the premises (FTTP) build of over 750,000 houses passed in the fourth quarter. Philip Jansen, BT chief executive, said: “Openreach continues to build like fury, having now passed 7.2 million premises with 1.8 million connections and a strong and growing early take-up rate of 25%.” 

In addition, Openreach has signed an agreement for Sky engineers to complete in-premises work on their network.

BT also announced a joint venture with Warner Bros. Discovery to bring together BT Sport and Eurosport UK. BT commented that this “will create a really compelling combined sports offer for our customers, reduce our exposure to rights costs and provide a medium term route to exit.” 

BT has also agreed a longer-term deal with Sky to extend its reciprocal channel supply beyond 2030.

Looking ahead, BT expects year-on-year revenue growth, with adjusted EBITDA of “at least” £7.9 billion in the 2023 financial year, compared to £7.6 million in 2022.

BT’s share price hit a high of 206 pence last June, before falling by nearly 35% to 135 pence in November. That said, it remains to be seen whether the current cost of living squeeze will take its toll on subscriber numbers and spend, as has happened with Netflix, which recently reported a decline in subscriber numbers

If this is the case, the recovery in its share price to around the 180 pence mark (as at 12 May 2022) may start to falter.

Here’s what you need to know about buying and selling BT shares.

Note: investing in shares comes with no guarantees. When buying company shares, it’s possible to lose some, or even all, of your money.

That said, over the long term – a minimum of five years (preferably longer) – it’s possible for share-based investments to produce superior returns to those available from low interest-paying deposit accounts, especially once inflation has been factored in.

Why own stocks?

It’s worth asking yourself why you want to buy shares. Are you looking for capital growth, income from dividends or a combination of both? Your investment objectives will determine what type of shares you invest in, whether high-growth technology shares or more defensive companies with a reliable dividend stream.

Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products or services with future growth potential. These should provide a solid platform for future share price growth.

That said, other factors such as takeover rumours can drive up a company’s share price. Investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.

How to buy stock

Once you’ve decided which company to invest in, there are several steps to buying shares.

1) Open an account

Whether you’re a seasoned share trader, or new to stock market-based investments, you’ll need to open an account with a regulated brokerage to buy shares in BT.

Stockbroking is a competitive market place and services for DIY investors come in a range of guises – from online investing platforms run by some of the biggest names in financial services, to investment trading apps that work off your smartphone or tablet.

Before opening an account, bear in mind the following:

  • Keep your ultimate financial goals in mind
  • Be prepared to ride out stock market ups and downs
  • Aim to keep trading costs to a minimum
  • Remember that share investing can prompt tax charges, for example, when selling part of your portfolio, unless you use a tax-efficient wrapper such as an ISA.

And before buying any shares, it’s worth asking yourself these questions:

  • Should I take financial advice?
  • Am I comfortable with the level of risk in question?
  • What’s my investing budget?
  • Can I afford to lose money?
  • Do I understand the company in which I’m looking to invest?
  • Am I protected if my platform provider/adviser goes out of business?

2) Where is BT traded?

The ticker symbol for BT Group plc is BT.A. It is listed on the London Stock Exchange, which is open for trading from 8am to 4.30pm.

3) Do your research

To find out more about BT, visit the company’s online investor relations page

It’s also worth comparing BT’s valuation to other comparable UK telecoms companies. One way of doing this is to look at the relative price-earnings ratios – shares trading on a high price-earnings ratio have high expectations of substantial future growth. 

Another useful research tool is brokers’ 12-month share price forecasts, which are available on financial websites. There are a number of brokers following BT shares, and their price forecasts give an indication of the upside and downside potential of BT’s share price over the next year.

4) What’s your investing strategy?

People tend to invest in one of two ways: either with a lump sum purchase, or via smaller, steadier amounts over time.

The latter method is often referred to as a means of ‘pound cost averaging’, a stock market hack which helps you pay less per share on average over time in falling stock markets. Rather than waiting to build up a lump sum, it means an investor’s money can be put to use in the market straightaway. However, drip-feeding your investment may sacrifice capital growth if the share price is rising and you will also pay more in share-trading fees.

5) Place an order

Once you’re ready to buy shares in BT, log in to your investing account or trading app. Type in BT’s ticker symbol (BT.A) and the number of shares you want to buy or the amount of money you’re prepared to invest.

Many brokerages also allow you to add a ‘stop loss’ once you have bought the shares, which allows you to limit your losses if the share price falls. For example, if you buy shares at £10, and set a stop loss of £9, your shares would be sold if the share price falls below £9, limiting your potential loss to 10%.

6) Review BT’s performance

Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital you review how each component is performing on a regular basis: monthly, quarterly, or annually.

Doing this gives you the opportunity to review performance and ask if any adjustments to your holdings are required – to maintain the status quo, buy more stock, or sell existing shares.

How to sell stock

At some point, you will want to sell your holdings. To do so, log in to your investing platform, type in the ticker symbol (BT.A) and select the number of shares you want to sell.

Note that if you’ve made a substantial profit, you may be liable to pay Capital Gains Tax (CGT) when you come to sell your holdings, especially if your shares were held outside of a tax-exempt wrapper such as an Individual Savings Account or a Self-Invested Personal Pension.

The CGT tax-free allowance for the tax year 2022-23 is £12,300. Find out more here about CGT rates and allowances

How to invest in BT via a fund

Investing directly in individual stocks can be an absorbing and, hopefully, profitable experience. It may also qualify you for shareholder perks specific to the company in question.

Investing directly in individual companies can, however, leave you vulnerable to stock market volatility and unforeseen swings in share prices. 

That’s why financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold a ready-made portfolio of upwards of fifty different company shares.

Being a component of the FTSE 100, BT is found in many UK funds and investment trusts, as well as tracker-style Exchange Traded Funds.


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