After a pounds 56m exceptional charge to meet the premium on repurchasing pounds 320m of debt from the Government in December, and an increase in redundancy costs from pounds 9m to pounds 17m, BT's pre-tax profits fell by 7.1 per cent to pounds 705m.
For the nine months to 31 December pre-tax profits fell by 26.9 per cent to pounds 1.73bn. The decline largely reflected a rise in redundancy costs from pounds 18m to pounds 459m.
The improving underlying trend in BT's profits comes before the sale of the Government's remaining 22 per cent share stake, at present worth pounds 5.6bn, which the stock market expects either in June or November. BT shares rose 3.5p to 411.5p.
Extensive staff cuts have helped BT to reduce costs by 0.8 per cent in the first nine months of its financial year. However, the cost-cutting drive has been hit by a huge increase in telephone call-box crime. By September 1992 this had risen to 1,000 incidents a week from 1,000 a month a year earlier.
Since March last year 33,100 BT employees out of a total 210,300 have taken redundancy at a cost of pounds 592m, of which pounds 133m had already been provided. Liability for pension benefits for early retirements will cost a further pounds 530m.
Up to 3,000 more jobs could go by March, with a further 15,000 in each of the next two years, reducing the workforce to 134,000.
Inland call volume rose by 1 per cent in BT's third quarter. This led to a 1.2 per cent increase in call revenues, on a 12-month moving average, which marks a turnaround after almost a year of decline.
Iain Vallance, BT's chairman, warned that tightening regulation and the difficult economic outlook were still exerting downward pressure on BT's performance.
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