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BT SAYS SORRY TO INVESTORS

BT CHIEF executive Ian Livingston yesterday apologised to shareholders after an &ldquo;unacceptable performance&rdquo; by BT Global Services (BTGS) forced the firm to cut its dividend for the first time in eight years.<br /><br />Writedowns of &pound;1.3bn against BTGS, which supplies IT services to multinational companies, drove a loss of &pound;134m in the year ending March 2009 &ndash; despite BT&rsquo;s retail, wholesale and Open Reach divisions performing well.<br /><br />The telcoms giant slashed its full year dividend by 59 per cent to 6.5p, and said it plans to cut 15,000 jobs this year &ndash; in addition to the 5,000 that went last year.<br /><br />But BT was keen to reassure that a mixture of cost saving and restructuring would lead to 2009-10 being a &ldquo;year of delivery&rdquo;, and that all redundancies will be voluntary.<br /><br />&ldquo;It has been a very difficult year and yes, I apologise to shareholders,&rdquo; said Livingston. &ldquo;But we absolutely will take (BTGS) forward and do the right things.&rdquo;<br /><br />BT said that it will focus on margins at BTGS &ndash; which posted an 86 per cent drop in fourth quarter earnings, despite growing its revenues by six per cent. BT gave a confident outlook for 2009-10, expecting to have in excess of &pound;1bn free cash flow. It also said it has agreed with trustees to increase its annual pension contributions to &pound;525m.<br /><br />BT shares closed down 6p at 88.4p.