Sweated assets pay off for BT

Sweating its assets has enabled BT, the UK's biggest network operator, to declare a 48% increase in profits to £406m on sales that dipped slightly to £4.98bn for FY2Q11.

Ian Grant

Sweating its assets has enabled BT, the UK's biggest network operator, to declare a 48% increase in profits to £406m on sales that dipped slightly to £4.98bn for FY2Q11.

Commenting on the results, CEO Ian Livingston said BT had made significant progress in improving profitability and cash-flow. This enabled it to invest in building the foundations for revenue growth in 2012-13.

"We have increased our EBITDA outlook for the year and now expect to hit our £2bn free cash-flow target two years early," he said.

Orders for Global Services, BT's outsourcing division, were up 50% at £2.1bn and BT's £2.5bn fibre roll-out had passed three million premises, Livingston said.

"BT Infinity (its high speed consumer broadband product) orders are now running at over 4,000 per week. BT Vision customers now stand at more than half a million, with more developments planned to enhance our offering. Our share of DSL broadband net additions was 45%, one of our highest shares ever," he said.

Highlights

Revenue was down 3% to £4.98bn
Adjusted EBITDA (earning before interest, taxes, depreciation and amortisation) increased by 3% to £1.45bn, primarily due to improved efficiency leading to lower costs
Total group operating costs were down 5% or £216m to £4.34bn
Depreciation and amortisation decreased by 3% to £737m reflecting lower capital spending in FY2Q10
Excluding depreciation and amortisation, group operating costs were down £194m or 5%.
Total labour costs decreased by 4% to £1.45bn
Direct labour costs were broadly flat year on year
Savings from staff cuts were offset by the impact of pay inflation and higher pension costs.
Indirect labour costs reduced by 20% as BT continued to cut agency and contract staff and redeploy existing permanent staff.
Payments to other telecommunications operators were down by 7% due to lower mobile termination rates and lower transit and wholesale call volumes.
Property and energy costs were 12% lower as the group continued to drive efficiency improvements.

BT line of business results	Adjusted revenue			Adjusted EBITDA			Operating cash flow
Second quarter to 30 Sep 2010	2010 £m	20092 £m	Change %	2010 £m	2009 £m	Change %	2010 £m	2009 £m	Change %
BT Global Services	1,991	2,024	-2	138	95	45	-28	-103	73
BT Retail	1,929	2,019	-4	414	451	-8	333	430	-23
BT Wholesale	1,054	1,109	-5	326	344	-5	222	212	5
Openreach	1,235	1,234	-	532	507	5	255	280	-9
Other and intra-group items	-1,232	-1,264	3	42	18	133	-247	-114	-117
Total	4,977	5,122	-3	1,452	1,415	3	535	705	-24

Highlights

Read more on IT strategy

Start the conversation

0 comments

Register

Login

Forgot your password?

Your password has been sent to:

Please create a username to comment.