British Telecommunications Plc posted a solid set of preliminary results for for the year ending March 31 1988 which sent its share price up a couple of pence and affirmed its long term value in the eyes of the City. Telecom reported a 10.9% increase in pre-tax profits to UKP2.3m, on turnover up 9.1% to UKP10,200m. The company announced that it would be sharing some of the spoils with its staff with the reintroduction of its employee profit sharing scheme which has been allocated UKP38m in new shares. Telecom shares will be allocated on an equal basis among 215,000 staff in contrast previous schemes which have been linked to salary and status. Analysts were particularly cheered by the 14% increase in international traffic which compares favourably with last year’s 11% growth. International enterprises were generally good with Iain Vallance, chairman of British Telecom reporting a fantastic demand from the Pacific Basin which may signal a new bout of activity in that area. Inland calls also rose by a more modest 8% but overheads remained high, impacted by Telecom’s endeavours to meet quality of service targets. The company refused to put a figure on the cost of achieving service goals but said that it would be able to revert to its staff shedding policy soon, although reductions would be modest in the next two years before coming back into line with the original plan of 5,000 fewer employees a year, thereafter. Vallance said that Telecom’s record investment of UKP2.3m in modernisation of its exchanges and transmission meant that customers are getting jam today, not tomorrow. But his overall comments left one analyst less than enchanted, and according to the Evening Standard he came out of the meeting saying that they were bullish for Mercury, Telecom’s UK arch-rival owned by Cable & Wireless Plc.
