This is why we can't have nice things, BT tells Global Services after 3% sales droop
Will no one rid me of this turbulent beast?
BT's problem child Global Services once again dragged sales down, this time by three per cent in the third quarter of its financial year to £5.97bn.
The UK telco fingered its troubled outsourcing division as the "main contributor" to revenue decline in the three months to December 31, 2017, with its sales in the quarter falling nine per cent to £1.26bn. "Challenging market conditions," and a reduction in IP exchange volumes were blamed.
BT is undertaking a major restructure of Global Services, which was the cause of a previous profit warning. At the end of its last financial year, BT announced it was chopping 4,000 jobs worldwide, with many expected to come from Global Services. That followed a yearly profit fall of 19 per cent to £2.4bn.
However, reported profit before tax for the third quarter jumped £660m "due to higher specific items in the prior year." In the same period last year, profits plunged 37 per cent to £526m, due to the fallout from the firm's accounting scandal in Italy.
BT was forced to write off £530m, saying it was "deeply disappointed" with the improper practices uncovered.
Openreach sales remained flat for the three months at £1.26bn. The unit yesterday announced plans to double its fibre penetration target to 3 million UK premises by 2020.
Revenue at BT Consumer, which has typically reported steady growth, was also flat at around £1.26bn.
The only real area of growth was EE, which increased 4 per cent to £1.35bn. The firm's 4G subscribers jumped from 19.4 million last quarter to 19.6 million.
A sale of Global Services has long been rumoured as the business shifts to being more of a consumer operation.
BT Group CEO Gavin Patterson said: "Our third quarter financial results are broadly in line with our expectations and we remain confident in our outlook for the full year. We continue to improve our customer experience metrics across the Group, with our sixth successive quarter of improved customer perception." ®