Telco sees green shoots

BT Group is a huge juggernaut of a company. Former chief executive Ben Verwaayen managed to turn it around, but ran out of steam. It was up to his replacement Ian Livingston, who took the helm in 2008, to get it moving again. If yesterday’s results are anything to go by, he is finally on his way.

The cost-cutting programme is continuing apace, with £1.75bn of reductions in the full-year, nine per cent more than forecast. Cashflow was also vastly improved, with an inflow of £1.9m compared to £737m a year ago, while net debt stood at £9.283bn, a reduction of £1m.

Even Global Services, the IT services arm that has performed disastrously in recent years, is showing signs of improvement. It reduced its operating loss from £2.1bn to £348m, while ebitda actually turned positive at £457m, against a negative £1.3bn last year.

The pension scheme remains a massive worry, with the latest deficit put at a whopping £5.7bn in March. Still, this is nothing new.

It’s probably too early to call this a recovery story, but these numbers suggest that one is on the way. Investors with a risk appetite could well do worse.