BT Group (LSE:BT.A) has raised its interim dividend 2% to 2.5p a share as first-half pre-tax profit rose 12% to £1.1 billion.
Normalised free cash flow fell 59% to £236 million as working capital absorbed more cash.
Revenue from continuing operations rose 1% to £8.8 billion in the six months to 30 September, helped by higher handset sales. Adjusted EBITDA rose 1% to £4.1 billion, while adjusted service revenue fell 1% to £7.7 billion as income from legacy voice services declined.
Openreach now connects more than 10 million homes and businesses to full fibre, it said, with the telco's customer take-up moving to 41%. Its network reaches 24.1 million premises, keeping it on track for its March target of 25 million.
BT kept its full-year forecasts at £8.1 billion to £8.2 billion for adjusted EBITDA and around £2 billion for normalised free cash flow. Both figures exclude the impact of its October TalkTalk acquisition.
In London, BT shares moved up 5.6% to 245p in Thursday morning's trade.
