Five
year financial summary | Introductory
notes | Cautionary
statement |
Financial Highlights
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Five year financial summary
YEARS ENDED 31 MARCH
| 1995 | 1996 | 1997 | 1998 | 1999 | |
| £m | £m | £m | £m | £m | |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Profit and loss account | |||||
| Total turnover - ongoing activities | 13,900 | 14,470 | 15,021 | 16,039 | 18,223 |
| Discontinued activities | 958 | 2,066 | 2,358 | 1,372 | - |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Total turnover, including discontinued activities | 14,858 | 16,536 | 17,379 | 17,411 | 18,223 |
| Group's share of associates' and joint ventures' turnover | (965) | (2,090) | (2,444) | (1,771) | (1,270) |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Group turnover - ongoing activities | 13,893 | 14,446 | 14,935 | 15,640 | 16,953 |
| Other operating income (a) | 129 | 103 | 106 | 372 | 168 |
| Operating costs (b)(c) | (11,359) | (11,449) | (11,796) | (12,355) | (13,305) |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Group operating profit | 2,663 | 3,100 | 3,245 | 3,657 | 3,816 |
| Group's share of operating profit (loss) of associates and | |||||
| joint ventures | 107 | 101 | 184 | (196) | (342) |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Total operating profit: | |||||
| Ongoing activities | 2,676 | 3,081 | 3,209 | 3,436 | 3,474 |
| Discontinued activities | 94 | 120 | 220 | 25 | - |
| 2,770 | 3,201 | 3,429 | 3,461 | 3,474 | |
| Profit on sale of fixed asset investments and | |||||
| group undertakings (d) | 241 | 7 | 8 | 63 | 1,107 |
| Net interest payable | (270) | (189) | (174) | (310) | (286) |
| Premium on repurchase of bonds | (75) | - | (60) | - | - |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Profit on ordinary activities before taxation | 2,666 | 3,019 | 3,203 | 3,214 | 4,295 |
| Tax on profit on ordinary activities: | |||||
| Corporation and similar taxes | (926) | (1,027) | (1,102) | (977) | (1,293) |
| Windfall tax | - | - | - | (510) | - |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Profit on ordinary activities after taxation | 1,740 | 1,992 | 2,101 | 1,727 | 3,002 |
| Minority interests | (9) | (6) | (24) | (25) | (19) |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Profit for the financial year | 1,731 | 1,986 | 2,077 | 1,702 | 2,983 |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Basic earnings per share | 27.8p | 31.6p | 32.8p | 26.6p | 46.3p |
| Basic earnings per share before exceptional items | 27.8p | 31.6p | 32.8p | 31.7p | 34.7p |
| Diluted earnings per share | 27.2p | 31.0p | 32.2p | 26.2p | 45.3p |
| Diluted earnings per share before exceptional items | 27.2p | 31.0p | 32.2p | 31.2p | 34.0p |
| Dividends per share (including 1997 special dividend of 35p) | 17.7p | 18.7p | 54.85p | 19.0p | 20.4p |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| (a) Including MCI merger break-up fee net of expenses in 1998 | - | - | - | 238 | - |
| (b) Including redundancy charges | 820 | 421 | 367 | 106 | 124 |
| (c) Including exceptional costs relating to the disengagement from MCI | |||||
| - | - | - | - | 69 | |
| (d) Including gain on MCI shares sold in 1999 | - | - | - | - | 1,133 |
| ------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ||||
| Figures for the years ended 31 March 1995 to 31 March 1998 have been restated for the changes in accounting policy and presentation summarised on page 66. | |||||
| 1995 | 1996 | 1997 | 1998 | 1999 | ||
| £m | £m | £m | £m | £m | ||
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| Cash flow statement | ||||||
| YEARS
ENDED 31 MARCH |
||||||
| Cash flow from operating activities | 5,114 | 5,829 | 6,185 | 6,071 | 6,035 | |
| Dividends from associates and joint ventures | 5 | 5 | 7 | 5 | 2 | |
| Returns on investments and servicing of finance | (348) | (150) | (220) | (160) | (328) | |
| Taxation | (1,175) | (784) | (1,045) | (1,886) | (630) | |
| Capital expenditure and financial investment | (2,535) | (2,500) | (2,820) | (3,108) | 1,046 | |
| Acquisitions and disposals | (2,260) | (132) | (252) | (1,501) | (1,967) | |
| Equity dividends paid | (1,065) | (1,138) | (1,217) | (3,473) | (1,186) | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| Cash inflow (outflow) before management of liquid resources | ||||||
| and financing | (2,264) | 1,130 | 638 | (4,052) | 2,972 | |
| Management of liquid resources | 2,557 | (1,317) | (504) | 2,247 | (2,447) | |
| Financing | (207) | 215 | (224) | 1,794 | (458) | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| Increase (decrease) in cash for the year | 86 | 28 | (90) | (11) | 67 | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| Decrease (increase) in net debt for the year | (2,146) | 1,319 | 849 | (3,860) | 3,146 | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| Figures for the years ended 31 March 1995 to 31 March 1998 have been restated for the changes in accounting policy and presentation summarised on page 66. | ||||||
|
Balance sheet |
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| AT 31 MARCH | ||||||
| Intangible fixed assets | - | - | - | - | 742 | |
| Tangible fixed assets | 16,012 | 16,496 | 16,802 | 17,252 | 17,854 | |
| Fixed asset investments | 1,082 | 1,057 | 1,273 | 1,708 | 1,832 | |
| Net current liabilities | (725) | (106) | (2,667) | (2,637) | (495) | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| Total assets less current liabilities | 16,369 | 17,447 | 15,408 | 16,323 | 19,933 | |
| Loans and other borrowings falling due after one year | (3,361) | (3,322) | (2,693) | (3,889) | (3,386) | |
| Provisions for liabilities and charges | (879) | (1,267) | (1,391) | (1,426) | (1,391) | |
| Minority interests | (132) | (180) | (208) | (223) | (216) | ---------------------------------------------------------------------------------------- | ----------------------------------------------------- |
| Total assets less liabilities | 11,997 | 12,678 | 11,116 | 10,785 | 14,940 | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| Total equity shareholders' funds | 11,997 | 12,678 | 11,116 | 10,785 | 14,940 | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| Total assets | 21,459 | 23,536 | 25,062 | 23,285 | 27,962 | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
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US GAAP |
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| YEARS ENDED 31 MARCH | ||||||
| Income before taxes | 2,580 | 2,774 | 3,326 | 2,791 | 3,745 | |
| Net income | 1,744 | 1,806 | 2,149 | 1,447 | 2,589 | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| Basic earnings per ordinary share | 28.0p | 28.8p | 33.9p | 22.7p | 40.2p | |
| Diluted earnings per ordinary share | 27.6p | 28.4p | 33.6p | 22.3p | 39.3p | |
| Basic earnings per ADS | £2.80 | £2.88 | £3.39 | £2.27 | £4.02 | |
| Diluted earnings per ADS | £2.76 | £2.84 | £3.36 | £2.23 | £3.93 | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
| AT 31 MARCH | ||||||
| Total assets | 23,879 | 26,183 | 27,239 | 27,951 | 29,323 | |
| Ordinary shareholders' equity | 12,185 | 13,010 | 11,588 | 12,615 | 13,674 | |
| ---------------------------------------------------------------------------------------- | ----------------------------------------------------- | |||||
Introductory notes
British Telecommunications plc is a public limited company which has listings on the London, New York and Tokyo stock exchanges and is registered in England.
This is the annual report for the year ended 31 March 1999. It complies with UK regulations and is the annual report on form 20-F for the Securities and Exchange Commission to meet US regulations.
This annual report has been sent only to shareholders who have elected to receive a copy. A separate annual review and summary financial statement for the year ended 31 March 1999 has been issued to all shareholders.
In this annual report, references to the "financial year" are to the year ended 31 March of each year, e.g. the "1999 financial year" refers to the year ended 31 March 1999.
References to the "company" are to British Telecommunications public limited company, and references to "BT" or the "group" are to the company and its subsidiaries, or any of them as the context may require.
Cautionary statement regarding forward-looking statements
In order to utilise the 'Safe Harbor' provisions of the US Private Securities Litigation Reform Act of 1995, British Telecommunications plc is providing the following cautionary statement. The annual report includes 'forward-looking information' within the meaning of section 27A of the US Securities Act of 1933, as amended, and section 21E of the US Securities and Exchange Act of 1934, as amended.
Certain sections of this annual report are forward looking in nature. These include, without limitation:
A. those concerning (i) possible or assumed future results of operations of BT and/or its associates and joint ventures, (ii) impact of regulatory initiatives on BT's operations, (iii) expectations regarding competition, prices and growth, (iv) impact of the Year 2000 issue, (v) impact on BT of the proposed global venture with AT&T, (vi) adequacy of capital, (vii) impact of legal proceedings on BT's financial position and results of operations; and
B. those preceded by, followed by, or that include the words "believes", "expects", "anticipates" or similar expressions.
Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause such differences include, but are not limited to, material adverse changes in economic conditions in the markets served by BT; future regulatory actions and conditions in BT's operating areas, including competition from others in the UK and other international telecommunications markets; the timing of entry and profitability of BT in certain national markets; the risks, costs and uncertainties (including the lack of available information) in addressing Year 2000 issues; and fluctuations in foreign currency exchange rates.