Global Services revival continues at BT

published 3 November 2011

Telecoms titan BT kept its full-year outlook unchanged after a second quarter performance that reinforced its confidence of hitting its targets.

Adjusted profit before tax, which excludes the effects of a retrospective regulatory ruling in Germany, rose 15% to £570m in the three months to 30 September - the group's second quarter - from £496m in the corresponding period of last year.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) edged up 3% to £1,495m from £1,452m.

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Adjusted revenue eased 2% to £4,894m from £4,977m in the July-September quarter of last year. With wholesale transit revenues excluded, revenue rose 0.4%.

Adjusted earnings per share jumped 10% to 5.6p from 5.1p last year.

Net debt at the end of September stood at £8,317m, down 4% from £8,704m a year earlier.

On a divisional basis, the Global Services division - once the ugly duckling of the group after management took their eye off the ball back in 2009 - was the best performer.

The division, which serves corporate customers, saw EBITDA grow 15% to £159m from £138m last year, on revenue that climbed 1% to £2,014m from £1,992m.

The Retail arm's revenue fell 3% to £1,853m from £1,919m last year, but EBITDA still rose 7% to £445m from £414m. The Wholesale division's EBITDA fell 6% to £305m from £326m on the back of a 7% fall in revenue from £1,051m last year to £982m.

The OpenReach division grew revenue by 4% to £1,280m from £1,235m the year before, while EBITDA advanced 7% to £567m from £532m last time round.

"We expect to continue to offset the economic headwinds through improved customer service and processes, better efficiency, and investment in the future of the business," informed chief executive Ian Livingston.

"We are accelerating our fibre roll-out programme to cover two-thirds of the UK by the end of 2014 - one year earlier than planned and creating 520 new jobs. With the already announced government support, we believe there is the potential for fibre-based services to reach more than 90% of the UK within a few years thereafter," Livingston claimed.

"Our performance in the quarter reinforces but does not change our outlook for the year," he concluded.

The interim dividend has been increased by 8% to 2.6p from 2.4p last year.