Thursday May 15, 08:11 AM
BT Q4 sales up on global services strength; wholesale declines UPDATE
(Adds further detail throughout)
LONDON (Thomson Financial) - BT Group PLC (LSE: BT-A.L - news) . reported a 2 percent rise in fourth-quarter sales as strong growth at global services and its 'new wave' revenues again offset a declining trend in BT's traditional fixed-line operations.
The telecoms giant said fourth-quarter revenues rose 2 percent to 5.422 billion pounds, ahead of consensus forecasts of 5.302 billion pounds.
Revenues from BT's 'new wave' non-traditional IT and broadband services rose 9 percent compared last year, which offset a 2 percent decline in its traditional business as the company continued to suffer competitive pressure and the fallout of the premium-rate phone-in scandal last year.
Pretax profit before specific items and leavers rose 3 percent to 714 million pounds.
Leaver costs, one-off restructuring costs and the group's Openreach obligations pulled pretax profit after specific items down 18 percent to 494 million pounds.
Full-year sales also rose 2 percent to 20.704 billion pounds and pretax profit before specific items was flat at 2.506 billion pounds.
Fourth quarter margins at the group's global services division rose 0.4 percent year on year to 13.7 percent and sales were up 10 percent to 2.226 billion pounds.
BT wholesale's decline continued, with sales falling 12 percent in the quarter to 1.180 billion pounds.
The company added 150,000 net additions to its broadband stable, which equates to a 30 percent share of the total connections in the quarter, bringing BT's customer base at March 31 to 4.4 million.
Looking ahead, the group expects to continue to increase earnings per share before specific items and leaver costs, despite lower contributions from its pension scheme.
The group expects net finance income from its pension scheme to fall to 313 million pounds next year from 420 million pounds in 2007 to 2008.
At March 31, BT's pension scheme was in surplus to the tune of 2.1 billion pounds, compared with a deficit of 0.2 billion pounds in the same period of last year.
BT also said it sees a further 700 million pounds of cost savings generated from its continuing efficiency drive, in addition to the 625 million pounds of cost savings achieved in the full year.
The company said it expects capital expenditure to fall to 3.1 billion pounds in 2008 to 2009 from 3.34 billion in the 2007 to 2008 financial year.
BT also updated on its 21st Century Network, a new network that will deliver faster services and which will also deliver further cost savings for the group with a target of 1 billion pounds annually.
Instead of mass-migrating customers to its new network and offering new services later, the company said it will now offer new services from the start
BT now expects its ethernet service to be available across 'the widest footprint in the UK' by April next year and next-generation broadband to be available to more than 10 million homes and businesses within the same timetable.
Chairman Sir Michael Rake commented: 'I am confident that we have the right strategy and people in place to continue to deliver value for our shareholders and expect to increase dividends per share in 2008/09.'
BT upped its full-year dividend by 5 percent to 15.8 pence per share.
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