More job cuts planned as BT profits hit pounds 2.7bn

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The Independent Online
PRE-TAX profits at BT rose by almost 40 per cent to pounds 2.7bn last year while it shed 14,700 jobs. It expects to reduce staff by a further 15,000 in 1994/5 at a cost of pounds 750m.

Sir Iain Vallance, chairman, said yesterday that continued reductions in prices to meet the regulatory cap would reduce revenues this year by pounds 700m. The company had 130 competitors, including cable TV companies, but there was encouraging growth in demand for BT products and services.

In the year to 31 March, BT's earnings per share rose by 44.2 per cent to 28.5p from 19.8p a year earlier. The dividend is 16.7p, up from 15.6p. Sir Iain said that after eliminating the effect of redundancy charges and one-off items the underlying increase in earnings was less than 1 per cent.

Turnover grew by 3.3 per cent last year to pounds 13.67bn. Inland call volumes - often taken as an indication of the state of the economy - rose 6 per cent, although this was largely offset by lower prices.

The company has launched an aggressive marketing campaign to increase use of the telephone network and win customers back from Mercury and cable companies. Michael Hepher, managing director, said he would soon announce more low price intiatives.

He said BT would begin to charge by the second rather than by units from next January, with all customers paying by the second by the middle of next year.

The company had won back pounds 200m worth of business from Mercury Communications. Mr Hepher said the number of customers won by cable companies had slowed slightly but this could not be taken as a trend.

The company said directors' salaries would be frozen this year. Sir Iain's has been static at pounds 465,000 since 1992 and will not be reviewed until May 1995, but he received a bonus last year of pounds 185,000.