Aggressive internal cost cutting helped BT to a big leap in profits despite a drop in revenue for the financial year up to March 31.
Revenue for the year came in at £20.1bn, down 4% year on year. Revenue for Q4 dropped 6% to £5.1bn. Both of these were in line with expectations, the firm said. BT added over 1.1 million new broadband customers over the year, with 252,000 of those arriving in the last quarter. Its superfast broadband package is being rolled out to 80,000 premises each week, the company said.
This helped BT to record a 71% jump in profits for the year to £1.7bn from £1bn last year. Profit for the quarter also saw a sharp increase, from £251m to £495m, a rise of 97%.
BT achieved operational cost savings of £1.1bn for the year, a 7% improvement on the previous year. Total labour costs dropped 5% and indirect labour costs were down 18%, helping the firm to improved profits.
"We have delivered profits and free cash flow ahead of expectations for the year, while making significant investment in the business for the future. We expect to continue to grow our profits and free cash flow whilst investing to return BT to growth. These results show we are making progress, but we are well aware there remains a lot more to do," said CEO Ian Livingston.
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, said the results were a positive step forward for the company.
"On the downside, overall revenues remain in decline, a position which at some point will need to be reversed, whilst the appropriate business model across the broader telecoms, media and technology arenas remains fluid and uncertain," International Business Times quotes him as saying.
"Nonetheless, the relatively new and home grown Chief Executive deserves credit for today’s results. Cash flow, the core attraction for any telecoms company, has been boosted, a fact now underpinning the progressive dividend policy," he added.
