BT shares made their biggest gains in almost a quarter of a century in a major boost for its new boss.
Unveiling her plan to turn the telecoms giant around, Allison Kirkby chided investors who have placed a record £300million bet against the FTSE 100 company.
A number of major institutions and hedge funds have taken ‘short’ positions in the stock – meaning they expect the share price to fall.
But the shares jumped 17.2 per cent, or 19.45p, to 132.6p yesterday, the biggest gain for 24 years.
Kirkby said she hoped that her blueprint means that ‘some of those shorts will start to diminish’.
Turnaround plan: New BT boss Allison Kirkby said it would aim to save another £3bn by the end of 2029 through updating processes and shutting down old networks
Speaking to the Financial Times, she added: ‘I always love to squeeze the shorts and prove them wrong.’
The comments came as BT said profit fell 31 per cent to £1.1billion in the year to the end of March after a large writedown on its business unit.
Revenue edged up 1 per cent to £20.8billion. But it raised the dividend for the year by 4 per cent to 8p a share and announced another £3billion of cost-cutting.
Karen Egan, head of telecoms at Enders Analysis, said the increase in the dividend was designed to ‘assuage the doubters’.
Public disclosures last week revealed that Canada Pension Plan Investment Board and Blackrock Investment Management, along with hedge funds including AKO Capital, have all bet against the company by ‘shorting’ the stock.
BT shares remain down around 75 per cent since their peak in 2015 despite yesterday’s rise.
But analysts suggested that it had turned a corner. Matt Britzman, an equity analyst at Hargreaves Lansdown, said: ‘BT is growing slowly.
Credit where it’s due, there are clear signs of progress.’
Kirkby, who took over in February, said it would aim to save another £3billion by the end of 2029 through updating processes and shutting down old networks.
She said she was exploring ‘options for all our international footprint’, which could include partnerships and selling parts of the business. But the group said the UK was its primary focus.
Despite the cost-cutting plan, Kirkby said that there was ‘no change’ to its proposals to cut almost half of the 130,000 workforce by the end of the decade, including about 10,000 to be replaced by Artificial Intelligence.