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All
references in this section to the prior year results
or performance against the prior year are in relation
to the results from continuing activities.
Group
turnover increased by 2% to £18,727 million in
the 2003 financial year. The strength in the group’s
new wave businesses and a strong defence of the group’s
market share in its existing businesses was offset by
price deflation. This compared to growth of 8% in the
2002 financial year and reflected the difficult market
conditions.
Group
operating profit before goodwill amortisation and exceptional
items at £2,790 million for the 2003 financial
year was £19 million higher than the prior year.
The cost efficiencies achieved during the year were
offset by a £90 million increase in leaver costs,
the negative group operating profit effects of unwinding
the Concert global venture and the Telereal property
sale and leaseback transaction. In total, these effects
reduced group operating profits by over £400 million,
although this was compensated for at the profit before
tax level by a corresponding improvement in our share
of the operating profits of associates and joint ventures
and net interest payable.
In
the 2002 financial year the group operating profit before
goodwill amortisation and exceptional items declined
by 10% to £2,771 million.
BT’s
share of associates and joint ventures operating profits
before goodwill amortisation and exceptional items was
£181 million in the 2003 financial year compared
to a £108 million loss and a £157 million
loss in the 2002 and 2001 financial years, respectively.
The improvement in the 2003 financial year mainly reflected
the benefit of the unwind of the Concert global venture.
Net
interest payable before exceptional items was £1,146
million for the 2003 financial year, an improvement
of £271 million against the 2002 financial year
as a result of the reduction in the level of net debt.
In the 2002 financial year net interest payable was
£221 million higher than the 2001 financial year
effecting the increased net debt.
The
above factors resulted in the group achieving a profit
before taxation, goodwill amortisation and exceptional
items of £1,829 million in the 2003 financial
year, an increase of 44%, reflecting the underlying
operating performance of the group and lower net interest
costs. In the 2002 financial year the profit before
taxation, goodwill amortisation and exceptional items
of £1,273 million was £490 million lower
than the 2001 financial year.
The
taxation charge for the 2003 financial year was £598
million on the profit before goodwill amortisation and
exceptional items, an effective rate of 32.7% compared
to 41.5% and 21.8% in the 2002 and 2001 financial years.
The high effective rate in the 2002 financial year was
mainly due to the impact of loss making subsidiaries
outside the UK for which tax relief was not available.
The low effective rate in the 2001 financial year reflected
tax relief on losses surrendered by discontinued activities.
Basic
earnings per share before goodwill amortisation and
exceptional items were 14.2 pence for the 2003 financial
year, an increase of 61% from 8.8 pence in the 2002
financial year, and 19.3 pence in the 2001 financial
year. The 2002 financial year reflected the higher operating
costs and net interest payable.
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