By Will Sturgeon, 12 February 2004 09:55
NEWS BT would appear to be in reasonable health, reporting third-quarter profits of £526m and showing significant improvement in a number of its previous ailments.
Perhaps most notably, the telco's staggering debts have been cut to £8.79bn - down 32 per cent, or around £4bn, from the level it was at come the end of the comparable quarter last year (£12.91bn), while pre-tax profits were up one per cent and BT Group revenue was 2.6 per cent down on the same period last year.
Ben Verwaayen, CEO of BT, said in a statement: "The transformation of our marketplace is accelerating and BT is driving that change by providing our customers with new technology and services with greater capabilities and lower cost.
"The momentum of this transformation is building with broadband volumes now approaching two million lines and we are now taking orders of over 45,000 per week."
BT also reported £2bn worth of contract wins during the quarter.
But Verwaayen's to-be-expected positivity did not convince everybody. Mike Cansfield, research director with Ovum, said BT is to be "applauded" for some of its results. "However, numbers don't lie," he added, referring to the decline in revenue.
"The fact is that group turnover declined for the second successive quarter. There are two causes for this - the new wave are not growing fast enough and efforts to slow the decline of traditional revenues are not being successful enough. This may seem tough, but BT has to try harder."
The results provide a strong foundation for future growth, according to BT Group finance director Ian Livingston, who outlined the company's intention to continue with an aggressive policy of cost savings.
Livingston said: "We remain committed to growing long-term shareholder value by transforming our revenue streams to new wave products and services; driving more than £1bn of cost savings over the next three years; investing for the future; and managing the Group's balance sheet more effectively."
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