BT dividend: cash cover and yield
BT pays £0.0857 per share in the base case, rising to £0.0910 per share. In March 2026, free cash flow was £102m against £807m of dividends and £126m of share purchases, leaving a shortfall of £831m.
How much does BT pay per share?
Base dividends rise from £0.0857 to £0.0910 per share. The bear holds at £0.0707, while the bull reaches £0.0964. The base applies 3% annual growth, consistent with BT's low-to-middle single-digit policy. The cut remains plausible because FY26 real free cash flow was only £53m and TalkTalk is expected to have a £400m FY27 cash impact.
| Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | |
|---|---|---|---|---|---|
| Real free cash flow per share | 0.53 | 2.96 | -7.00 | -0.98 | -2.16 |
| Free cash flow per share | 1.03 | 3.58 | -6.29 | -0.19 | -1.10 |
| − Dividends paid, per share | 8.12 | 7.91 | 7.59 | 7.47 | 2.25 |
| − Share buybacks, per share | 1.27 | 0.79 | 1.33 | 1.37 | 1.82 |
What this means. The company's own free cash flow per share is higher because it leaves out pension deficit payments, spectrum costs, and other specific items that we count.
Does BT’s cash cover its dividend?
In March 2026, free cash flow was positive at £102m. Dividends were £807m and share purchases were £126m. The resulting shortfall was £831m. BT could meet it from cash reserves, investment sales or borrowing, but each choice reduced financial flexibility.
| Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | |
|---|---|---|---|---|---|
| Free cash flow | 102 | 357 | -629 | -19 | -111 |
| − Dividends paid | 807 | 788 | 759 | 751 | 228 |
| − Share buybacks | 126 | 79 | 133 | 138 | 184 |
| = Paid out more than the free cash flow | 831 | 510 | 1,521 | 908 | 523 |
| Paid to shareholders | 933 | 867 | 892 | 889 | 412 |
What could change BT’s dividend?
Management guides to £2,000 million of normalised free cash flow in FY27 and roughly £3 billion by the end of the decade. Openreach targets 25 million FTTP premises by December 2026. FTTP means fibre-optic cables running all the way to a home or business. It also targets 800,000 broadband line losses in FY27. BT expects low-to-middle single-digit annual dividend growth; larger payments depend on stronger credit metrics and residual cash. TalkTalk is expected to have a £400 million FY27 cash impact, excluded from the existing free-cash-flow target.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| EBITDA | 8,225 (7,800 / 8,350) | 8,375 (7,725 / 8,650) | 8,550 (7,825 / 8,950) |
| Dividends per share | 0.09 (0.07 / 0.09) | 0.09 (0.07 / 0.09) | 0.09 (0.07 / 0.10) |
| Net debt | 16,432 (16,862 / 16,223) | 15,797 (16,592 / 15,279) | 14,989 (16,225 / 14,141) |
What is BT’s dividend yield at its share price?
At 206.90p, shareholders value BT at £20,623.047m. Enterprise value estimates the cost of the operating business, including debt that a buyer would assume, and stands at £37,318.047m. The difference is £16,695m. BT’s net debt includes lease liabilities, which are future payments for leased assets, while net financial debt excludes them. The valuation therefore depends on using the correct debt measure.
Cash gives the harder test. BT reported £1,508m of normalised free cash flow and a 4.0% dividend yield. Its normalised measure deducts investment, interest and leases, but excludes pension deficit payments and specified costs. Those obligations still consume cash, so dividend safety depends on what remains after them.