BT Ireland reports rise in revenues as parent commits to dividend
Earnings at telecoms giant to fall this year, new chief executive Philip Jansen says
BT said it secured a number of key contracts during the year. Photograph: iStock
BT Ireland has reported a 1 per cent rise in underlying revenues to £338.5 million (€393 million) for the 12 months to the end of March.
It added that earnings before interest, tax, depreciation and amortisation (ebitda) was up 5 per cent year on year.
The company, which employs just over 600 people locally, said it secured a number of key contracts during the year, including a five-year deal with SSE Airtricity for networking, voice and internet services.
It also signed data centre agreements with providers such as Vodafone and Paradyn, as well as a multi-million euro network contract with Pure Telecom.
Network investments made during the last 12 months included the completion of a 400 Gigabit ethernet trial, to support future high-speed broadband links at lower cost and greater distances.
“We continue to invest for growth, and recent investments in our network capability and customer platforms have contributed to a strong sales performance and positioned us well for the financial year ahead,” said BT Ireland managing director Shay Walsh.
Philip Jansen, chief executive of the unit’s parent, kept the group’s dividend in the face of declining profits while committing to the turnaround begun by his predecessor.
Mr Jansen said earnings would fall this year and BT needed to be “more competitive” as he laid out plans to accelerate a fibre network rollout. The dividend pledge was a relief for investors as the former monopoly faces enforced price caps, fierce competition for broadband customers and a large pension deficit.
The former Worldpay executive avoided major strategic shifts in his first results since taking over from Gavin Patterson on February 1st. Mr Patterson, a friend and former colleague of Mr Jansen, began cutting thousands of jobs last year after contract losses, an accounting scandal and run-ins with regulators. BT’s shares have lost half of their value in three years.
The cuts are set to free up cash for network spending. Mr Jansen said BT aimed to upgrade 4 million premises with fibre connections by March 2021, up from a previous goal of 3 million, responding to Government pressure to improve internet speeds. It aims to reach 15 million premises by the mid-2020s, 5 million more than its previous target.
“BT needs to be there to provide the digital infrastructure for the future,” Mr Jansen told reporters on a call, citing demand for artificial intelligence, machine learning and quantum computing. Addressing analysts later, he said BT had to “massively simplify our processes” and increase the use of robotics and automation.
With revenue declining across the entire business except BT’s consumer division, the company had already flagged the profit drop in the year to next March. BT said it expects annual adjusted earnings before interest, tax, depreciation and amortisation of £7.20 billion (€8.35 billion) to £7.30 billion (€8.46 billion). That’s lower than the £7.36 billion (€8.53 billion)average of analyst forecasts compiled by Bloomberg.
– Additional reporting: Bloomberg