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By Graham Hayday, 7 November 2002 17:00

NEWS BT today admitted that it had missed its revenue targets during its latest financial quarter, but still announced healthy profits. Pre-tax profits for Q2 2002 were up 55 per cent on the same period last year at £496m. Turnover was up two per cent to £4,661m - considerably less than the company's expectations. While the City welcomed the results, the revenue shortfall will worry BT. CEO Ben Verwaayen said in a statement: "Our revenue growth in the quarter was two per cent. Although the three year revenue target of six to eight per cent compound annual growth is unlikely to be achieved in the present market conditions, we expect total revenue growth for the second half to be in line with current market expectations." He added: "Future revenue growth will benefit from our focus on developing new wave initiatives, particularly in broadband and ICT." The company now has more than 450,000 broadband users, and has reduced its once mighty debt mountain to a more managable £13.1bn, down £285m during the quarter. That figure should be reduced by a further £2.5bn once the disposal of its stake in Cegetel is complete. BTopenworld has also increased revenue and cut its losses. The ISP reported turnover up 20 per cent to £67m, while operating losses fell 39 per cent to £22m. The company said that growth in its broadband products and its core narrowband business had played a key role in its improved performance.