BT on track to hit fibre target and annual cash flow guidance

LONDON, July 23 (Reuters) - BT expects to meet its target of reaching 25 million homes with its fibre network by the end of December, Britain's biggest broadband provider said on Thursday after it reported flat quarterly revenue and reiterated annual cash flow guidance.

CEO Allison Kirkby hailed a "solid start" to BT's financial year after a quarter in which she announced a joint venture with Verizon to combine the pair's international enterprise operations, allowing BT to focus fully on its home UK market. 

"Across Openreach and Consumer we achieved record new full-fibre connections and take-up, resulting in fibre contributing to more than half of our broadband revenues for the first time," she said in a statement. 

The company's Openreach network, which serves providers such as Sky and Vodafone as well as BT, added a net 574,000 customers in the quarter, boosting the number of premises connected to 9.4 million, representing a take-up rate of 40%, it said.

For the three months to the end of June, BT posted flat revenue of £4.3 billion ($5.76 billion), beating analyst forecasts.

Adjusted core earnings were down 1% at £2.01 billion, marginally short of forecasts, with BT saying that lower broadband and voice margins had offset cost savings.

Shares in BT, which said it was on track to meet guidance for free cash flow to rise to £2 billion this year from £1.5 billion, fell 1.5% in early trade. 

($1 = 0.7470 pounds)

(Reporting by Sarah Young and Paul SandleEditing by Kate Holton and David Goodman)