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February 7, 1997updated 05 Sep 2016 12:13pm

BT PLEASES MARKET WITH Q3 AT TOP END OF FORECASTS

By CBR Staff Writer

British Telecommunications Plc has come in towards the top end of analysts’ predictions with its pretax profits for the nine months to December. The company turned in pre-tax profits up 9.7% to 909m British pounds, against a range penciled in by analysts of 860m to 920m pounds, on revenue up 4% to 3,763m pounds. The company attributed its success to expanding overseas operations, telephone exchange line rentals, mobile communications and its systems integration business. It said its operations in the rest of Europe and Asia-Pacific are growing strongly, and its Concert Communications services is seeing increased demand and a rapid rise in revenue. British Telecom’s proposed acquisition of Concert partner MCI Communications Corp (CI No 3,043) to form Concert Plc is proceeding successfully, and the companies expect to complete the deal in the fall. However, Telecom ruled out the possibility of such a deal presenting itself in Asia either in the near future, or for some years to come. Finance director Robert Brace told Reuters At the moment there aren’t any opportunities to do an MCI-type deal in Asia, and he said he doubted there would be in the next few years. The company has been wooing Japan’s Nippon Telegraph & Telephone Corp for years, and earlier this year chief executive Sir Peter Bonfield said it would continue to court Nippon, but he simply wanted the company to be kept in the frame until the Japanese goverment decided how it would carve up the telecommunications industry (CI No 3,043). The Concert integration and services business expects revenue to double this year to approach $1bn, and is expected to break into profit at the operating level within the next 18 months. The company said the demand for high speed ISDN lines is strong, with a 5.3% growth in the number of business lines inthe year to December. Although the residential market is now highly competitive, the company reckons numbers of lines have remained virtually unchanged. Mobile communications grew 11.7% in the nine months, in- cluding Cellnet Mobile Communications Ltd growth. The systems integration business revenue came mainly from its acquisition of Dutch computer services company the Rijnhaave Groep NV last year (CI No 2,896), Telecom said. About 5,000 staff are expected to leave the company during the year at a cost of around 350m pounds, 50m pounds less than envisaged in November. Over 4,000 staff took voluntary redundancy terms in the first nine months of the year, at a cost of 274m pounds. The company plans to increase its gearing during 1997 by paying a special dividend to shareholders of 35 pence per share, and has made a provision of 2.24bn in the accounts. The special dividend is expected to be paid with the final dividend for year to March 31, which is forecast at 19.85 pence, up 6.1% on last year.

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