BT's third quarter financial results

14 February 2011

 

We continue to make progress, with profits and cash flow in the quarter ahead of last year

On Thursday 3 February, we announced our latest set of financial results for the third quarter to 31 December 2011. In the quarter, profit before tax¹ was up 30% to £531m and earnings per share¹ up 32% at 5.4p. Free cash flow continued to improve, up 69% in the quarter to £515m. BT’s pension scheme deficit reduced to £2.7bn net of tax in the quarter using the IAS19 accounting measure. This compares with a deficit of £6.4 billion in the third quarter last year. The increase in assets of £1.5bn in the quarter reflects good investment returns in the quarter and the deficit payment of £525m made in December.

In addition, BT Global Services is now expected to be cash flow positive this year, a year earlier than targeted.

BT’s Chief Executive, Ian Livingston, said: “These results show that we are making progress on a number of fronts. There is always more to do but our performance underpins our outlook for this year and the period to 2012/13.”

Business highlights

Retail had a good quarter with growth in business revenues and at 53% our highest share of DSL broadband net additions for eight years. This reflects the success of our broadband strategy, including BT Infinity and Wi-Fi as well as our competitive offers and growth in our PlusNet brand.

Global Services had operating cash flow of £115m compared with an outflow of £27m last year and expect to generate £100m of operating cash flow in 2001/11 and around £200m in 2011/12. This is a good signpost on the road to recovery.

BT Wholesale saw a broadly flat quarter but still delivered a solid performance including signing a new IP voice contract with KCOM Group.

Openreach had good profit growth and saw an increase in its copper line base. Fibre roll out has been impacted by the poor weather but the programme is progressing again at a good pace and we are seeing encouraging take up.

¹ – before specific items