Rake: BT has hit a watershed
BT HAS reached a watershed this year when it finally crawled back to profit, according to its chairman Sir Michael Rake.
Speaking at the firm’s annual meeting Rake said BT had achieved “year of delivery” as it
turned a profit and arrested its declining revenue.
He said: “A lot has changed since last year’s annual general meeting and I’m pleased to say that, from BT’s perspective, a lot of that change has been for the better.”
He praised the firm for cutting its cost base by £1.8bn in the last financial year and increasing its cash flow by more than a billion pounds to £1.9bn in the same period. He singled out the turnaround of the firm’s embattled Global Services division, which had performed so badly it was forced to axe former boss Francois Barrault in 2008.
He said, “We have seen cost transformation at Global Services, leading to a marked improvement in profitability. I am now in the happy position where I can stand before you and say that we have a very solid performance across all of our main operating divisions”.
Rake said the “achievements” enabled BT to invest for the future, reduce its debt, support its pension scheme and reward its shareholders with a progressive dividend.
However, he warned that while BT was a “much better company than a few years ago” it could not afford any complacency.
Deep cuts and improvements in service slowed BT’s drop in revenue to just two per cent last year and the company now predicts a return to growth in 2012-13. Its sales for the year totalled £21bn and it predicts this will fall to around £20bn in the coming year.