Thursday 24 October 2019

BT posts lower earnings and warns of further falls in 'challenging' market

Photo: PA
Photo: PA
Ellie Donnelly

Ellie Donnelly

Telecoms giant BT has posted a drop in annual earnings and warned that sales and profits are set to fall over the year ahead amid a "very challenging and competitive UK market".

The group reported a 2pc fall in underlying earnings to £7.4bn (€8.6bn) for the year to March 31.

It cautioned that underlying earnings are expected to fall to between £7.2bn (€8.3bn) and £7.3bn (€8.5bn) over 2019/20, with a drop of around 2pc in adjusted revenues.

The UK and Ireland business-to-business market "remains challenging" the group said.

In Ireland revenue increased 1pc to £338.5m, while profit was up 5pc year-on-year.

Last month it was reported that BT is planning to exit the Irish market though a £400m (€462m) sale of its BT Ireland unit, which provides services to corporate clients.

The British multinational is understood to be inviting bids for BT Ireland as part of a wider exit from its Global Services international arm.

However, BT Ireland managing director Shay Walsh at the time cast doubt on the story via social media. He told people not to "believe everything you read in the paper, especially when there is no source quoted". A spokeswoman for BT Ireland last month said it would not comment "on rumour or speculation".

On a statutory basis, pre-tax profits at the group lifted 2pcpc to £2.7bn in the year to March 31 on revenues 1pc lower at £23.4bn.

BT's recently appointed chief executive, Philip Jansen, said the shareholder dividend payout would remain unchanged for 2018/19 and also for 2019/20 "given our outlook for earnings and cash flow".

But this will come as a relief to its investors after speculation that the group was considering cutting the payout.

Mr Jansen, who took on the top job in February, said: "While we are really well positioned in a very challenging and competitive UK market, we have a lot of work to do to ensure we remain successful and deliver long-term, sustainable value to our shareholders.

"We need to invest to improve our customer propositions and competitiveness.

"We need to invest to stay ahead in our fixed, mobile and core networks, and we need to invest to overhaul our business to ensure that we are using the latest systems and technology to improve our efficiency and become more agile."

On announcing full-year figures, BT also increased its target for deploying ultrafast fibre connectivity to four million premises by 2020/21 from its previous goal of three million premises.

By the mid-2020s, BT said it aims to pass 15 million premises, up from its previous target of 10 million.

It added that restructuring efforts were on track, having achieved annual cost savings of £875m.

BT swung the axe on 13,000 jobs last year under its revamp plans.

(Additional reporting PA)

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