BT Group reported a significant jump in profit on flat revenue for its first quarter, thanks to a trimming of costs and the generation of new revenue streams.
The telecommunications giant reported pre-tax profits of £502m to 30 June, a 56% increase over the £322m reported for the same period last year. Earnings per share also spiked, coming in at 4.1 pence, 64% higher than the 2.5 pence reported for the first quarter of 2002.
Year-on-year revenues for the quarter were £4.58bn, yet BT managed to reduce net debt from £13.4bn in the first quarter of last year to about £9bn for the quarter just ended.
"Our focus on financial discipline, defending our core business and creating new revenue streams continues to deliver results," said BT chief executive Ben Verwaayen.
The company also trumpeted the growth of its wholesale broadband connections, which by early June had surpassed its goal of reaching one million total connections by the end of the quarter. There was an installed base of 1.06 million ADSL lines by 30 June and orders were coming in at more than 25,000 a week, more than double the rate from a year earlier, BT said. By the end of the quarter, ADSL broadband was available to 71% of the country, the company said.
BT has been engaged in a strong broadband push. Its efforts have benefited from a reduction in the cost of converting an exchange to support the delivery of broadband services. This in turn has allowed BT to lower its "trigger levels", or the number of broadband requests it needs to receive from the public to make such a conversion viable economically.
BT Broadband and BT Openworld Broadband performed well in the quarter, with a combined customer base of 536,000 by 30 June.
Scarlett Pruitt writes for IDG News Service