BT's cost-slashing plumps up earnings but full-year sales drop 4%
Carrying rivals' traffic hits revenue due to regulatory price cuts
BT's Openreach division was the only wing of the company's business to up its sales figures compared with the same period a year earlier, but all other areas of the national telco's biz saw revenue decline for the year ended 31 March 2012.
However, while total sales for the the full-year were down some 4 per cent to £19bn, the company reported to the City this morning that its core earnings rose by 3 per cent to £6bn.
BT, cheeringly, is also sitting on a £2.5bn cash flow – a figure that outshone analyst predictions.
The company's boss Ian Livingston said that having money in the bank had helped BT "to invest in the business, make a £2bn payment into the pension fund, reward employees and deliver double digit growth in shareholder returns".
He added that the telecoms giant had now "passed" 10 million homes and businesses in the UK with its fibre optic broadband cabling upgrade. Livingston claimed BT was "many months ahead of schedule" with that rollout.
More than 500,000 BT punters have signed up to the firm's fibre-based Infinity product, he noted.
The company added more than one million subscribers to its broadband network via its retail division as well as through the likes of wholesale customers BSkyB and TalkTalk over the course of its most recent fiscal year.
"While we will be impacted by economic and regulatory headwinds, we expect to continue to grow profits over the next two years, with normalised free cash flow growing to above £2.4bn in 2014," said Livingston.
During the year, BT's wholesale biz – hamstrung by regulatory price cuts – slipped some 7 per cent in revenue to £3.9bn, while the company's Openreach wing climbed 4 per cent with sales of £5.1bn.
Adjusted pre-tax profit at the telco ballooned over the past 12 months by 16 per cent to £2.4bn, from £2.08bn a year earlier.
BT said its dividend increased some 12 per cent to 8.3p in the full year, a number shy of the City's forecasts.
Shares in the national telco were down nearly 2.5 per cent on the FTSE 100 this morning and are currently trading at 211.80p. ®