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BT profits on the up as broadband plans unveiled

COMMUNICATIONS giant BT today unveiled plans to roll out super-fast broadband to two-thirds of UK homes by 2015 as it celebrated its return to profitability.

The FTSE 100 group revealed group profits of £1bn for the year to 31 March – up from a £244m loss last year – after a significant improvement in its beleaguered Global Services arm.

This division, which provides telecoms services to multinationals and public bodies, posted a loss of £358m for the year compared with £2.1bn for the previous 12 months following the arrival of a new management team headed by Jeff Kelly.

Meanwhile full-year revenue dipped slightly to £20.91bn from £21.43bn the previous year.

BT, which cut operating costs by seven per cent in the last year, says its efficiency improvements will now allow it to accelerate its growth plans.

It expects around four million homes to have access to fibre broadband by the end of 2010 with further sharp growth in the coming five years as its £2.5 billion investment pays off.

Its fibre services were originally planned to reach around 40% of the UK population by 2012.

This increased broadband reach should help the group’s plans to grow its television services which are currently based around its on-demand digital TV service BT Vision.

Chief executive Ian Livingston said the picture is looking brighter for the company in the coming months.

"During the next three year period we expect to improve our underlying revenue trends, and grow EBITDA and free cash flow, while investing in the business, supporting the pension fund, reducing net debt and paying progressive dividends. We are on track with our goal of creating a better business with a better future," he said.

The group, which operates in 170 countries, has pencilled in revenues of around £20bn with operating cost savings of around £900 million.

BT also announced a 15 per cent rise in full-year dividend to 6.9p.

It soared to the top of the FTSE 100 risers' board with gains of more than eight per cent. Its shares stood at 130.6p.