BT Q1 profits fall 13pc

29 Jul 2004

Despite claiming a slight increase in turnover in the first quarter of £4.5bn sterling, UK telecoms giant BT shocked the marketplace with an unexpected 13pc fall in profit to £434m sterling. Despite this, new wave turnover from areas like broadband and virtual private networks was up 32pc to £936m sterling.

The company reaffirmed its commitment to its 21st century broadband network, revealing that trials are taking place with a large scale rollout planned for 2006. So far the company has clocked up some 2.7 million broadband end users.

Earnings per share were down 10pc at 3.7p a share. The company’s net debt of £8.3bn sterling was down 7pc on the previous year.

The company, which owns Ireland’s Esat BT, did not break down geographically how individual business units did. Cash inflow from operating activities amounted to £1.2bn sterling in the quarter compared to £1.5bn sterling in the first quarter last year.

Ben Verwaayen, BT’s chief executive, said: “The transformation of our business continues at pace. This is the second consecutive quarter of underlying growth in turnover. New wave turnover, including ICT, broadband, mobility and managed services grew by 32pc to £936m sterling.

“New wave businesses generated over 20pc of group turnover in the quarter. This strong growth in new wave has offset the decline in turnover from the traditional business and these results reflect a continuation of recent trends.

“Whilst the environment remains challenging we are confident in our strategy to deliver long-term growth for shareholders,” said Verwaayen.

By John Kennedy