BT returns to revenue growth for first time since 2009Friday 31 January 2014 09.25
Britain's BT returned to quarterly revenue growth for the first time in four and a half years today, driven by record customer demand for superfast broadband and its growing new sports TV service.
The 168-year-old former UK telecoms monopoly last reported revenue growth shortly before a major profit warning in the first quarter of 2009.
It said revenue for the three months to the end of December was up 2% to £4.6 billion, ahead of expectations at £4.5 billion.
The group also posted third quarter pre-tax profit up 8% to £722m, about £50m ahead of expectations.
The results were helped by continued improvements at its Global Services division, the unit behind a 2008 and 2009 profit warning that handles the IT needs of multi-national corporations, which offset the investment in the new sports service.
The strong performance enabled the group to lift its core earnings outlook for the current financial year to the upper end of its £6-6.1 billion range.
"This is an encouraging set of results. Our strategic investments are delivering," BT's chief executive Gavin Patterson said in a statement.
The group said it had enjoyed a record quarter for fibre demand, and now had some 1.9 million customers taking the faster and more expensive service, out of its 7.1 million broadband customer base.
The results are likely to act as further vindication of BT's recent strategy - cutting millions of pounds in costs to enable the country's biggest fixed-line telecoms group to invest in a more than £3 billion roll-out of a fibre network.
With the provision of superfast broadband increasing the range of services BT could deliver into a home, the company stunned the sporting world in 2012 when it snapped up a package of English soccer Premier League rights in 2012.
Less than 18 months later it won the auction to show all European Champions League matches, proving itself an able challenger to Rupert Murdoch's dominant pay-TV provider BSkyB and underlining its willingness to invest in new services to protect its core telephony and broadband business.
BT said today the strong demand for fibre and sport had helped its consumer business to grow by 6%, its best performance in a decade, while the number of users disconnecting lines was at 70,000, well down on the 173,000 who left BT a year ago.
Meanwhile, BT Ireland said its underlying revenue, excluding transit revenue, grew 3% in the three month period.
The company said it secured new contracts with clients, including a new five year deal with the Ardagh Group in December.
"We are continuing to challenge and succeed in the Republic of Ireland market by offering a unique IT services capability that is underpinned by our world class global network," commented Colm O'Neill, the chief executive of BT Ireland.