BT’s broadband success has seen a bigger-than-expected improvement in full-year profits to £1.7 million.
BT has reported a 71 per cent rise in profits after more than £1 billion of cost savings helped it overcome a four per cent drop in revenues. The improvement in profits was helped by the company’s continued success in broadband, with the proportion of customers signing up to its own service now at an eight-year high.
BT said 252,000 customers were added by companies using BT’s network, such as Sky or TalkTalk, of which 64 per cent signed up with BT.
The retail arm grew profits by two per cent to £1.34 billion, while the company’s formerly troubled Global Services division, which caters for businesses and governments across the world, narrowed losses to £141 million.
Cost savings were higher than the £900 million targeted but unlike the previous financial year, when the company saved £1.75 billion, job losses were not the main driving force behind the efficiency gains.
Stripping out one-off charges from last year, adjusted profits were 20 per cent higher at £2.1 billion.
BT added that its pension scheme was in better health, with the valuation deficit down from £9 billion to an estimated £3.2 billion. But it has so far been unsuccessful in persuading the pensions regulator to provide an updated assessment on the fund after it raised “substantial concerns” 15 months ago about an agreement with trustees to plug the deficit.
A deal with the regulator is seen as key in paving the way for a rise in the company’s dividend payments to shareholders. Today, the company announced a seven per cent rise in its full-year dividend to 7.4p a share.
Chief executive Ian Livingston said: “These results show we are making progress, but we are well aware there remains a lot more to do.”
BT added 1.1 million homes to its network over the course of the year, which equates to a new connection every 30 seconds. BT said it has connected seven new homes for every one connected through Virgin Media’s cable service.
It has added 144,000 customers to its super-fast broadband service after its launch about a year ago. Livingston claimed its roll-out is among the fastest in the world and by the end of this month it will be capable of providing the service for five million premises.
Some 30,000 new customers were added to its Vision broadband TV service, which offers Sky Sports 1 and 2, in its final quarter, bringing the total to nearly 600,000.
BT’s Global Services division saw its orders up 10 per cent at £7.3 billion and it also turned cash-flow positive a year ahead of plan.
Livingston described Global Services as a UK success story as the company works on a number of contracts across the world, including supporting the Brazilian lottery and post office and Colombia's largest company.