BT’s Q4 Revenues Up 3%

BT said that its strategy of focusing on convergence continued to deliver in Q4. Networked IT services contract wins were £2 billion in the fourth quarter taking the total BT Global Services contract wins to £3.4 billion in the fourth quarter, with £9.3 billion achieved over the last twelve months.

For the full year ending March 31, 2007, BT’s revenue increased 4% to £20.2 million. Strong growth in new wave revenue continued and at £7,374 million new wave revenue was 17% higher than last year. This strong growth more than offset the decline in traditional revenue of 3% said BT.

Sir Christopher Bland, chairman of BT, commenting on the full year results, said: “BT has come a long way in the past five years. This is a very strong set of results which demonstrates how much has been achieved. Revenue grew by 4% and earnings per share before specific items grew by 16%.

“I am delighted to report that our proposed full year dividend is 15.1 pence per share, 27% higher than last year, moving to a two thirds payout ratio a year earlier than we had previously announced. In addition, because of the financial strength of the company, we are introducing a new £2.5 billion share buyback programme which we expect to be completed by March 31, 2009.

“We have delivered on our commitments and are confident we will continue to grow revenue, EBITDA, earnings per share and dividends over the coming year.”

Ben Verwaayen, chief executive of BT, said: “We have finished the year with a terrific all round performance. The figures show BT in great shape – revenue, EBITDA, earnings per share and free cash flow are all growing and new wave businesses now generate 40% of our revenues. I am particularly pleased that BT is now the UK’s number one retail broadband provider. BT Global Services had an excellent quarter securing orders worth £3.4 billion and winning more than 200 new customers.

Commenting on the results, Mike Cansfield, telecoms practice leader at Ovum, said: “Looking at the financials, there is not a great deal to say other than BT has pulled off a clean sweep of positive numbers. These results are consistent with a well established trend and not a grand finale. Five years ago BT promised to put broadband at the heart of the new company. This quarter BT announced it had 10.7 million wholesale broadband connections overall and 3.7 million in retail making it number one in the retail broadband market. Mission accomplished.

“Over the past few years we have seen that BT can successfully grow revenues by up to 5% each quarter largely on the back of ICT and broadband; and generate approx £0.5 billion FCF in every quarter. But BT is no longer satisfied with this – it has now embarked on a transformation programme designed to stimulate the next leap forward.

“Transforming the internal workings of the company is complex but manageable. What will be just as challenging for BT is to explain to its wholesale and retail customers the full range of its new capabilities. A major marketing push to promote BT Vision (BTs IPTV service) began in the UK last weekend. This will be an interesting barometer to see if BT can perform the external transformation required to grow the top-line at a faster rate.”