BT Group Plc (BT)  posted stronger-than-expected fourth quarter and full year earnings Thursday but issued a cautious outlook, including lower shareholder payouts, as the legacy U.K. telecoms group attempts to put an accounting scandal in its Italian business behind it.

BT said earnings per share for the three months ending in March, its fiscal fourth quarter, were marked at 3.8 penc, taking the full year EPS to 19.2 pence against a FactSet consensus of 0.28 pence per share. Adjusted operating profits for the full year were marked at £2.69 billion for the fourth quarter and £24.062 billion for the full year, both modestly ahead of FactSet consensus. 

"This has been a challenging year for BT," said CEO Gavin Patterson. "We've faced headwinds in the UK public sector and international corporate markets and must learn from what we found in our Italian business. Openreach also received a fine from Ofcom after an investigation into historical Deemed Consent practices revealed it fell short of the high standards we expect."

"We take these issues extremely seriously and are putting in place new measures, controls and people to prevent them happening again. Learning from the challenges of this year will make BT a stronger company for the future."

BT shares were marked 1.72% lower at 306.55 pence each in the opening 30 minutes of trading in London, extending losses past 20% since it said writedowns in its Italian business linked to the accounting scandal.

BT said it expects to see adjusted operating profits of around £7.5 billion to £7.6 billion for the current fiscal year ending in March 2018, a forecast that is largely in-line with revisions the group announced when it revealed the depth of the accounting scandal in its Italian division earlier this year. 

However, BT said it expects share buybacks of around £100 million in the 2017/2018 fiscal year, about half the pace it forecast in January's outlook revision.

BT declared a modestly larger-than-expected dividend of 15.4 pence per share for the 2016/2017 fiscal year, but altered its guidance for the current year to paying a "progressive" dividend, as opposed to a previous commitment to grow it by around 10%.

The company also said that Patterson and outgoing finance director Tony Chanmugam would not receive bonus payments for the previous year and the payouts for the two previous years had been recalculated. 

"I'd signalled to the Board back in Jan that it would be inappropriate to take a bonus, if one is due, and that's what you can see in today's announcement," Patterson told Bloomberg Television. "As a CEO you need to be setting an example for everyone across the business and I completely support this decision."

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