THE TURNAROUND of BT Group under Ian Livingston has been nothing short of remarkable. When he became chief executive in 2008, its IT services arm Global Services was a basket case that threatened the very survival of the entire group.
In an attempt to steal a share of big contracts from established rivals such as IBM and HP, the division had signed scores of deals that could never be profitable.
One of the first things Livingston did when he stepped up to the top role was to issue a profits warning that wiped £2bn off the value of the company, sending its shares crashing to 115p – their lowest price since BT’s 130p initial public offering.
Since then, Livingston’s preferred modus operandi has been unflashy but consistent progress. It has been clear for some time that he had turned the tanker around, with operational cash flow at Global Services turing positive in 2010-11 – a year earlier than planned.
Now Global Services has gone from being a millstone to the jewel in the crown. Quarterly revenues grew up by one per cent to £2bn, some £100m ahead of forecasts, meaning the division is once again the biggest contributor to the top line. This time, the sales haven’t come at the expense of margins; Ebitda was up 15 per cent to £159m.
Yesterday’s numbers suggest Livingston’s turnaround plan is all but complete. Now the question is what next?