BT profit lifted by Global Services

City A.M. Reporter
BT reported a seven per cent increase in third-quarter core profit as it continued to cut costs, and said its recovering Global Services unit would be free cash flow positive this year.

Britain's biggest fixed-line services supplier said it had gained market share in retail broadband and now had 53 per cent of the market. It said the results for the quarter to end-December gave it confidence in its outlook.

"These results show that we are making progress on a number of fronts. There is always more to do but our performance underpins our outlook for this year and the period to 2012/13," chief
executive Ian Livingston said in a statement.

Total revenue fell three per cent to £5.04bn, in line with expectations, while earnings before interest, tax, depreciation and amortisation (EBITDA) of £1.48bn was ahead of market forecasts.

Analysts had expected revenue of £5.05bn and EBITDA of £1.46bn, according to Thomson Reuters StarMine SmartEstimates, which weights analysts' forecasts according to their past accuracy.

Global Services, BT's enterprise unit which Livingston has been restructuring after a period of fast growth but poor profitability, increased its EBITDA margin to 7.1 per cent from 5.8 per cent a year earlier.

BT said it expected Global Services to generate operating cash flow of around £100m this fiscal year to end-March – turning positive a year earlier than expected – and £200m in 2011/12.