Fibre-gobbling punters help BT deposit solid profit
Cuts also counter revenue dip in Q3
BT reported this morning that its sales had fallen 5 per cent for the three months ended 31 December, however earnings and cash generation remained steady, the company added.
The national telco's third quarter revenue stood at £4.77bn, while adjusted pre-tax profit for the period was £628m - up 18 per cent compared with a year earlier.
Sales in all but one division of BT's business fell in the quarter. The company's Openreach wing was the only star of the show, with a 5 per cent sales climb to £1.3bn over the same period in 2010 when it pulled in revenue of £1.24bn.
Free cash flow in Q3 climbed £65m to £634m. BT, which has undergone a series of cost cuts, recorded adjusted earnings per share of 6.1 pence, an increase of 13 per cent.
Demand for broadband has once again been brisk – as was the case during the company's second quarter – however it still declined on 2010's Q3 figures.
During BT's most recent quarter the company attracted 146,000 new customers to its retail broadband service, compared with its haul of 188,000 new punters for the same period a year earlier.
Despite that decline, BT said its total market share of all net additions in the UK had grown 3 per cent to 56 per cent.
“We have delivered another quarter of growth in profits and cash flow despite the economic headwinds," said BT boss Ian Livingston.
He added: “In the UK, our fibre roll-out has accelerated bringing super-fast broadband within reach of over 7 million homes and businesses and we remain the number one broadband retailer with over 6 million customers. Our fixed-line base has now grown for the last five quarters and our active consumer line loss is at its lowest for five years."
Livingston said BT was on track to achieve the firm's 2013 earnings before interest, taxes, depreciation and amortisation (EBITDA) target of above £6bn a year early. BT expects to deliver free cash flow of around £2.4bn in 2012, he added.
Less cheeringly, the company's pension deficit grew during the quarter to £4.1bn. ®