BT profits flat as chief executive departs

BT reported a three per cent rise in pre-tax profit for its fourth quarter, as outgoing chief executive Ben Verwaayen ended his tenure.

The telecoms firm said quarterly profits rose to £714 million on revenues of £5.4 billion, slightly better than expected, on 'new wave services'.

New wave revenue, which was expanded by Mr Verwaayen, was nine per cent higher at £2.3 billion. The services, which consist of broadband and corporate IT contracts, now account for 42 per cent of BT's revenue.

Mr Verwaayen is to be replaced by the group's former finance director and BT Retail head Ian Livingston at the end of the month.

Earnings per share grew 11 per cent to 7p and earnings before interest, tax, depreciation and amortisation (EBITDA) was up two per cent to £1.57 billion.

Mr Verwaayen joined BT in 2002 and began transforming the company from a fixed-line business to 'communications' company and is now a major broadband and corporate IT services provider.

Mr Verwaayen said: "We have finished the year in style with a strong fourth quarter performance. BT is in great shape with year on year growth in revenue, earnings per share, EBITDA, free cash flow and dividends per share."

However, profits were flat over the full year, standing at £2.5 billion. The company proposed a full year dividend of 15.8p per share, up five per cent from last year.

BT said £402 million of restructuring costs over the year hit profits at the firm.

The company's outlook for next year was optimistic and BT forecast £700 million in savings could be achieved. BT also said it expected to increase its dividend next year.

Shares in BT were performing well by mid-morning on the FTSE 100, up 2.6 per cent to 229.06p