Telecoms giant BT has said it expects earnings to remain largely flat over the year ahead as it presses ahead with a major cost-cutting overhaul and plans to refocus on its UK business.

The group reported underlying earnings up 1% to £8.21 billion in the year to March 31, as cost savings helped offset a 2% fall in revenues.

BT said it ended its financial year with 3% fewer staff, at 116,000 in total including contractors, while its directly employed workforce was slashed by 8%.

The firm has previously announced plans to cut up to 55,000 jobs worldwide by 2030 as it looks to shave billions of pounds off its cost base.

It said it was on track to deliver on the plans, with more than £900 million of annual cost savings delivered so far.

As revenues remain under pressure, the group is forecasting little change to underlying earnings over the new financial year, with guidance for between £8.2 billion and £8.3 billion.

Underlying revenues will remain at around £20 billion, having delivered £20.4 billion in 2024-25.

But the group said UK service revenues returned to growth in the second half of its last financial year, up 1% in the final quarter, limiting the overall annual decline to 0.4%.

Its networks division, called Openreach, was the only part of the business that saw both revenue and earnings growth over the year as it continued to roll out fibre across Britain.

The firm said it saw growth in its consumer broadband customer base during the final quarter for the first time since December 2021.

Chief executive Allison Kirkby said: “The momentum in, and impact of, our full fibre programme is such that we are now raising our build target by 20% to up to five million UK premises in 2025-26, keeping us comfortably on track to reach 25 million by the end of 2026.”

Ms Kirkby is leading a revamp of the company after taking on the top job last year and is considering selling off or breaking up its international arm, which the group has carved out from the rest of the business as it looks to refocus on its UK operations.

BT has been gradually reducing its overseas business as part of wider cost-cutting plans, recently selling off its troubled Italian business and previously agreeing the sale of its Irish wholesale and enterprise business unit.

Ms Kirkby said the group had “accelerated the pace of simplification and transformation” over the past year.