BT reported a slip in revenue and profits for the first half yesterday, but its new chairman indicated support for beleagured CEO Gavin Patterson.
In a note to employees, Jan du Plassis wrote: “I look forward to supporting Gavin and his management team as we work together to serve both our customers and our shareholders.”
Reported revenue slipped one per cent in the second quarter to £5.9bn. For the full half year to 30 September, revenue was £11.8bn.
Pre-tax profit for the half year dropped 22 per cent to just over £1bn, and earnings per share were down 29 per cent.
The company maintained its 4.85p interim dividend, but said that from next year interim payouts would be fixed at 30 per cent of the prior year's full year dividend.
Why it's interesting
The telecoms giant has been grappling with higher pension costs, though it reduced its pension deficit to £7.7bn from £8bn in June.
Today it said considering a number of funding options to address the deficit, including arrangements that would give the the pension fund a prior claim over some BT assets.
It was reported yesterday that BT would close its defined benefit pension scheme, but today the company said it was still considering options for this. It added that it was discussing this with unions and would undertake a 60-day consultation with affected employees.
Meanwhile the separation of Openreach has been met with industry support. BT said it had made progress on setting up a new governance framework for the brand, and the new board under Mike McTighe was "providing strong, independent leadership".
Like its competitors, BT continues to face increasing sports broadcasting costs which weigh on profits. The Premier League, Box Nation and a Cricket Australia deal all contributed to an increase in operating costs.
What BT said
Chief executive Gavin Patterson said: "Our first half results are in line with our expectations as encouraging results in our consumer facing lines of business, notably EE, helped offset ongoing challenges in our enterprise divisions, in particular Global Services. Given our underlying business performance, we are maintaining our outlook for the year."