Broadband and IT services drive BT profits up 20%

BT has seen profits rise by 20%, boosted by a huge growth in "new wave" revenues that include broadband and networked IT services.

Results for the three months to the end of June show a 20% rise in pre-tax profits, to £511m, on overall revenue growth of 5%. But the significance of the new wave earnings was underlined by a fall in revenue from BT's traditional businesses, which declined by 6%.

New wave revenue, at £1,385m, was 48% higher than last year, accounting for 29% of the group's revenue compared with 20% in the first quarter of last year.

Excluding the recent acquisitions of Albacom and Infonet, growth in new wave revenue was 31%, with networked IT services revenue rising by 43% to £904m, and broadband revenue increasing by 69 per cent to £314m. 

BT chief executive Ben Verwaayen said: "This has been a great first quarter and builds on the momentum we have seen gathering for more than a year.  Revenue grew by 5% in the quarter and earnings per share grew by 25%.  We have achieved real international success." 

He added: "We won global networked IT services orders of £2.4bn in the quarter which takes orders for the last 12 months to a record level of more than £8bn - a terrific achievement."

Contract wins included a deal with the Ministry of Defence expected to be worth up to £1.5 bn over seven years. Wholesale broadband connections have also increased sharply, more than doubling in the year to 5.6 million.