BT unveils first-ever loss
Oh that it should come to this (sniff)
BT has announced its first-ever loss of £1.03 billion. The company - once famous for the amount of profit it made per second - has slipped into the red thanks to acquisitions, expensive 3G licences and faltering businesses.
Most significant was a £3 billion goodwill write-off for boosting its stake in German mobile company Viag Interkom after BT boosted its share from a minority 45 per cent to a majority 90 per cent. Then there was the billions it paid for 3G licences throughout Europe. And finally the losses made by Concert - its troubled joint venture with AT&T.
The news that BT has made its first-ever loss was tied in with a new restructure of the giant telco which will see the company split in two and its wireless arm floated off. The company has cancelled its dividend, said it will "continue reviewing" its position in Concert (like it has for the last year) and confirmed its intention to raise £6 billion courtesy of a rights issue.
Turnover for the year was £20.4 billion - up from £18.7 billion last year. Earnings before interest, tax etc was up slightly to £6.5 billion from £6.44 billion last year. However, profit fell from £3.1 billion to £2.1 billion. The goodwill charge for Viag Interkom of £3.2 billion therefore pulled BT into a loss. Earnings per share were minus 27.7p from a positive 31.7p last year.
Sir Christopher Bland said: "It will require determined and rapid action by management to achieve the transformation of BT. We have made a good start, the culture is changing, and I am confident that we can complete the process in the best interests of our shareholders, customers and staff."
By mid-morning BT's share price was six per cent down and still falling. ®
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