BT Group Lifts Dividend By 14% to Yield 3.1%

LONDON -- The shares of BT Group  soared 10% to 302 pence during early London trade this morning after the communications giant revealed pre-tax profits surging 11% to 2.7 billion pounds.

Britain's leading fixed-line telecoms company reported a 5% decline in full-year revenues to 18.2 billion pounds. The company said it continued to make cost savings, slashing 6% of operating costs in 2012, excluding transit.

BT reduced its net debt by 14% to 7.8 billion pounds, and announced it would buy back 600 million pounds of its shares over the next two years.

In light of these positive results, BT hiked its full-year dividend by 14% to 9.5 pence per share, from 8.3 pence last year. Additionally, the company said it plans to increase this dividend by 10%-15% for the next two years.

Chief executive Ian Livingston said:

We are doing what we said we would do. In an environment where it is easier to focus only on the short-term, we are investing in our future and delivering growth in profits and dividends.

Our focus on improving efficiency across the business will allow us to continue to deliver strong financial results while making these investments.

We have a lot more to do but we are now a lot better positioned to do it.

With a market cap of 24 billion pounds, BT is valued at 11 times its 2012 earnings. After lifting its dividend today, BT's shares offer a trailing yield of 3.1%.

Of course, whether that valuation and the prospects for the telecom industry combine to make BT a buy is something only you can decide.

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The article BT Group Lifts Dividend By 14% to Yield 3.1% originally appeared on

Mark Rogers has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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