71% rise in profits as BT hails broadband success
Telecoms group BT reported a 71% rise in profits today after more than £1 billion of cost savings helped it overcome a 4% drop in revenues.
The bigger-than-expected improvement in full-year profits to £1.7 billion was helped by the company's continued success in broadband, with the proportion of customers signing up to its own service now at an eight-year high.
BT said 252,000 customers were added by companies using BT's network, such as Sky or TalkTalk, of which 64% signed up with BT.
The retail arm grew profits by 2% to £1.34 billion, while the company's formerly troubled Global Services division, which caters for businesses and governments across the world, narrowed losses to £141 million.
Cost savings were higher than the £900 million targeted but unlike the previous financial year, when the company saved £1.75 billion, job losses were not the main driving force behind the efficiency gains.
Stripping out one-off charges from last year, adjusted profits were 20% higher at £2.1 billion.
BT added 1.1 million homes to its network over the course of the year, which equates to a new connection every 30 seconds. BT said it has connected seven new homes for every one connected through Virgin Media's cable service.
It has added 144,000 customers to its super-fast broadband service after its launch about a year ago. Mr Livingston claimed its roll-out is among the fastest in the world and by the end of this month it will be capable of providing the service for five million premises.
Some 30,000 new customers were added to its Vision broadband TV service, which offers Sky Sports 1 and 2, in its final quarter, bringing the total to nearly 600,000.
BT's Global Services division saw its orders up 10% at £7.3 billion and it also turned cash-flow positive a year ahead of plan.
Mr Livingston described Global Services as a UK success story as the company works on a number of contracts across the world, including supporting the Brazilian lottery and post office and Colombia's largest company.
The company said it expects to return to underlying sales growth in 2013, while underlying profits were expected to grow for the next two years.
Shares were down nearly 2% after strong gains in recent weeks.
This was despite the pension regulator putting its review of the scheme's recovery plan on hold, which eased fears that BT could be forced to pay more into the scheme than it currently plans to.
Morten Singleton, an analyst at Investec, said the release was generally positive, particularly the news on pensions and the company's increased growth prospects. He plans to increase his profit forecasts for the company, he added.
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