Profit at BT Ireland up 12%

Profit at BT Ireland rose 12 per cent in the year to March 31st 2010, despite underlying revenues declining 3 per cent.

The firm said the all-island operation was performing strongly, but challenging market conditions had hit revenues, which dipped to £801.1 million. In the fourth quarter, the trend improved, BT said, with revenues remaining flat year on year.

A combination of efficiency initiatives, which saw underlying costs fall 8 per cent, and major contract signings led to earnings before interest, tax, depreciation and amortisation rise 12 per cent for the year.

The company has also implemented an increased investment programme, and introduced services such as next generation service Etherflow, which is being rolled out nationally. BT Ireland is also investing in the rollout of an advanced fixed line network through local loop unbundling which will deliver up to 24Mbps broadband services to up to two thirds of broadband lines.

The firm is also partnering with Northern Ireland's Department of Enterprise, Trade and Investment (DETI) on a next generation broadband project that is aiming to bring faster broadband speeds to 85 per cent of businesses in rural and urban locations in the region by 2011, and has signed contracts over the year with Allianz, Bank of Scotland, Glanbia and VHI Healthcare.

Outgoing chief executive Chris Clark described it as "a year of transformation" for BT in Ireland.

"Through a greater focus on our unique capabilities, and increased investment, we have laid a strong foundation for future growth," he said. "We have successfully moved from directly to indirectly serving the residential market, and focused on delivering many of the largest networked IT services contracts awarded in the State. We've also managed to balance rigorous cost management programmes with strategic investments in our operations and Ireland Inc."

Mr Clark is to become managing director of BT Enterprises in London, and will be replaced by Graham Sutherland.

Mr Sutherland said the company was operating in a very challenging environment, but there wwere "encouraging signs" on revenue trends.

The company employs more than 3,400 people throughout the island of Ireland.

The wider BT group also published results today, indicating a long-awaited turnaround as cost cuts and service improvements began to take hold, slowing its full-year revenue decline to 2 per cent and lifting its shares 8 per cent.

Britain's biggest fixed-line telecoms provider said it was now in a position to increase investments in high-speed fibre and IPTV, and would spend an extra £1 billion to extend its fibre rollout to two-thirds of Britain.

BT predicted it would return to growth in 2012-13, helped by new consumer offerings and growth in corporate services in Asia. Its troubled Global Services IT services division should turn cashflow positive in 2011-12, it said.

"We are investing in the future of our business," chief executive Ian Livingston said, adding there was still a lot of work to do.

BT beat consensus estimates on all its key sales, profit and cashflow figures and outlined a three-year plan to return to growth, helped by further cost cuts.

BT has been plagued by underperformance at Global Services, which has caused two recent profit warnings at the group. In the fiscal year to end-March, Global Services revenues declined in line with the group, while core profit leapt 14-fold.

It is also operating under the cloud of a huge pension deficit, which stood at £5.7 billion at March 31st. BT is awaiting results of a review by Britain's pension regulator of its proposed 17-year plan to fund the deficit.

BT shares have fallen about 10 percent this year so far, underperforming a 7 per cent decline in the European telecoms index.

Additional reporting: Reuters