BT chairman Sir Michael Rake said the previous financial year had been a "year of delivery" at the company's annual general meeting in Liverpool today.
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The company wrote off huge losses in the Global Service division, which then endured several bosses in rapid succession in 2008-9, before returning to profit in 2009-10.
Rake said "We have seen cost transformation at Global Services leading to a marked improvement in profitability."
Rake said BT had cut its cost base by £1.8bn and increased its cash-flow by more than a billion pounds to £1.9bn in the 2009-10 financial year.
However, BT faces a £9bn "black hole" in its pension scheme, and is in court seeking a crown guarantee (pledge of support from taxpayers), to cover it.
Last year BT had to increase annual top-up payments for its defined benefit scheme from £280m to £525m until 2011. This, plus losses in Global Services, forced a 59% dividend cut and took away money for investment in superfast broadband.
However, BT said later that it would spend an extra £1bn on top of £1.5bn earmarked for rolling out fibre to the cabinet. This would increase the percentage of UK homes with access to up to 40Mbps broadband from 50% to 66%.
Rake ended by saying that BT was a "much better company than a few years ago" but it could not afford any complacency.