BT shares notched their biggest gains in almost a quarter of a century, in a big boost for its new boss.
Revealing her plan to transform the telecoms giant, Allison Kirkby berated investors who had placed a record £300m bet against the FTSE 100 company.
Several major institutions and hedge funds have taken “short” positions in the stock, meaning they expect the share price to fall.
But shares rose 17.2 per cent, or 19.45p, to 132.6p yesterday, the biggest gain in 24 years.
Kirkby said he hoped his plan would mean “some of those shorts will start to taper off.”
Recovery plan: New BT boss Allison Kirkby said she would aim to save another £3bn by the end of 2029 by updating processes and closing old networks.
Speaking to the Financial Times, he added: “I always love to squeeze the shorts and prove them wrong.”
The comments came as BT said profits fell 31 per cent to £1.1 billion in the year to the end of March after a large write-down at its business unit.
Revenue rose 1 per cent to £20.8bn. But he increased the dividend for the year by 4 per cent to 8p a share and announced another £3bn of cost cutting.
Karen Egan, head of telecommunications at Enders Analysis, said the dividend increase was designed to “calm the sceptics”.
Public disclosures last week revealed that the Canada Pension Plan Investment Board and Blackrock Investment Management, along with hedge funds including AKO Capital, have bet against the company by “shorting” the stock.
BT shares are still down around 75 per cent from their 2015 peak despite yesterday’s rise.
But analysts suggested it had turned a corner. Matt Britzman, equity analyst at Hargreaves Lansdown, said: ‘BT is growing slowly.
There are clear signs of progress, credit where credit is due.’
Kirkby, who took office in February, said he would aim to save another £3bn by the end of 2029 through processes of upgrading and closing old networks.
It said it was exploring “options for our entire international presence”, which could include partnerships and selling parts of the business. But the group said the UK was its main target.
Despite the cost-cutting plan, Kirkby said there was “no change” to its proposals to cut almost half of the 130,000 workers by the end of the decade, including about 10,000 who will be replaced by AI.