The data and network services operation of UK telecoms operator BT Group Plc talked up its recent recovery at an analyst event in London, where it restated its financial results to include recent acquisitions such as Infonet and Radianz, and the incorporation of BT’s Major Business division from its Retail arm.
In the year ending March 31, 2005, BT Global Services said it made pro-forma revenue of GBP 8.2bn ($14.8bn), with earnings before interest and tax of GBP 400m ($720m).
The company had previously reported sales of GBP 6.4bn ($11.5bn), and this new figure means that the Global Services arm now ranks alongside Computer Sciences Corp as the world’s fifth largest IT services organization. It now has 30,000 employees worldwide.
Andy Green, CEO at BT Global Services, said that the company’s global IP infrastructure, which currently connects 160,000 customer sites worldwide, is at the core of most of its contract wins.
He said: IBM built their services business around hardware and software, and HP built theirs around servers and printers. Our equivalent is our network infrastructure.
Green said that the company is ultimately aiming to become profitable at an operating level, but crucial to this will be its ability to smoothly manage the string of huge network outsourcing contracts it has won in the last three years.
During that period, BT GS has signed GBP 18bn ($32bn) of contracts, including huge deals with Reuters Group ($3bn), the UK National Health Service ($1.6bn) and Unilever ($1.51bn).
Green said that due to the high start-up costs of these contracts, BT GS does not typically gain any contribution from them until the third year, with cumulative cash flow break even occurring in the fourth.
The company is expecting to start reaping the benefits on its bottom line from these major deals in the next couple years, but to do this it will have to deliver. This will not be easy, particularly on the NHS project, where BT and other suppliers face heavy penalties for failure.
BT Global Services has taken steps to improve its project management capabilities by recruiting 1,500 professional services staff last year from consulting firms such as Deloitte, Accenture and PwC. It also expects to recruit a further 800 this year.
