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BT stands behind network and jobs, but no word on dividend yet

Published: 10:01 06 Apr 2020 BST

BT Group PLC -

BT Group PLC (LON:BT.A) says none of its staff will lose their jobs or be furloughed in the coming three months, though doubts continue to linger about the sustainability of the telecoms group’s dividend amid the widespread bonfire of corporate payouts due to coronavirus.  

With the UK put under lockdown by the government to limit the spread of coronavirus, BT said there had been “unprecedented demand for connectivity”. Both its fixed-line broadband network and EE mobile service were both “performing strongly”

As well as redeploying many of its 4,200 retail staff to provide services to vulnerable customers, the FTSE 100 group said it will offer a 1.5% annual pay increase to non-managerial staff, though this will not start until 1 July.

Managerial staff pay is being frozen for the coming year, however, while chief executive Philip Jansen, who self-isolated last month after testing positive for Covid-19, has pledged to donate his next six months’ salary to NHS charities.

In the statement, BT did not address one of its shareholders’ main concerns: the dividend.  

Last week, analysts at Barclays said the epidemic was “presenting clear opportunities to cut” for BT as it already faces rising capital spending requirements as it rolls fibre broadband and 5G mobile around the country.

“BT’s uncovered dividend remains the elephant in the room – given rising competitive pressures, rising capex, likely elevated pension contributions from 2021, material COVID-19 and macro uncertainty,” Barclays said, seeing a rebasing as “increasingly likely” and forecasting a cut to 5p from 7.7p per share.

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