BT Ireland blames once-off charges for its 5pc profits dip
Profits took a hit at BT Ireland this year – but the company has blamed this on one-off charges that it says will reap rewards in the long term.
While revenues rose 2pc to £661.6m (€808.5m), its latest set of annual results reveal that profits were down by 5pc.
But BT Ireland MD Colm O'Neill said this was due to start-up costs associated with a number of major new contracts, as well as a restructuring of its property commitments, which should cut costs in future. These costs included money spent expanding its network to facilitate Sky's entry on to the broadband market. Sky uses BT infrastructure for this.
Other contracts signed within the year include Pioneer Investments and Ardagh.
On the property side, the Irish subsidiary of the British telecoms giant has restructured its lease at its headquarters in Dublin technology hub Grand Canal Dock, which should allow long-term savings. It had leased seven floors of this building under an expensive rent agreement signed in the early 2000s, but was actually only using two of these. But a lease break clause that matured over the last 12 months has given it the opportunity to restructure. The company has now committed to another 10-year lease on two floors only. "It was a sensible business decision," said Mr O'Neill.
The company, which exited its consumer business in the Republic of Ireland five years ago, works with wholesale and corporate customers in the South but has retained a consumer unit in the North. "We are definitely seeing a recovery in the Republic's real economy among corporates, both multinationals and indigenous businesses," Mr O'Neill said. He also ruled out any re-entry into the consumer market in the Republic.
One of the company's most high-profile deals in the Republic was with television station Setanta. This provides Irish viewers with BT Sports coverage, including English Premiership matches. The three-year deal has been "a huge success", Mr O'Neill said, while declining to reveal just how lucrative it has been for either party.
Staff numbers remained broadly the same during the year though the distribution of staff has changed.