BT reseller biz goes gangbusters in Q1. But...
Currency swings and margins roundabouts
BT’s reseller arm, BT Global Services, had a good Q1 on the revenue front, jumping 13 per cent to £2.052bn for the period ending June 30. But margins are under pressure - and the financial community doesn't like it, marking shares down 10 per cent in early trading.
Currency movements accounted for a third of Global Services growth in Q1. But revenues outside the UK grew 33 per cent, on the back of acquisitions, increased take-up for networked IT services, as well as foreign exchange gains. The company notes contract wins of £8.2bn over the last twelve months and a strong pipeline of new business.
But it warns that "EBITDA margins may fall slightly in 2008/9 in part due to currency movements. However, we remain committed to achieving the 15 per cent EBITDA margin target and are creating the foundations this year for future margin expansion."
BT Global Services is the world’s third biggest IT channel services company, ranked behind EDS and Accenture, according to the 2008 VAR Business 500. With EDS soon to join the ranks of “Vendor Service Units” (as part of HP), there is every chance that BT will tip up in second place in next year’s list.
In its earnings statement today, BT also trumpets a good quarter from the business customer segment – its IT reseller business targeting small-ish and medium-sized UK businesses. Revenue grew five per cent to £661m, with new acquisitions, Lynx and Basilica, and organic growth contributing to the mix.
You want a breakdown of BT’s Q1 in telecoms? Press release here. ®