Broadband success helps to lift BT figures

The bigger-than-expected improvement in full-year profits to £1.7bn was helped by the company’s continued success in broadband, with the proportion of customers signing up to its own service now standing at an eight-year high.

BT said 252,000 customers were added in the last quarter through BT’s Openreach, whose chief executive Lydia Garfield went to school in Harrogate, and Wholesale companies.

The retail arm grew profits by two per cent to £1.34bn, while the company’s formerly troubled Global Services division, which caters for businesses and governments across the world, narrowed losses to £141m.

Cost savings were higher than the £900m targeted but unlike the previous financial year, when the company saved £1.75bn, job losses were not the main driving force behind the efficiency gains.

Stripping out one-off charges from last year, adjusted profits were 20 per cent higher at £2.1bn.

BT added that its pension scheme was in better health, with the valuation deficit down from £9bn to an estimated £3.2bn.

It said the Pension Regulator had also put on hold a review into BT’s pension fund recovery plan until the next funding valuation at the end of 2011.

This allayed fears that BT could be forced to pay more into the scheme, holding back future dividend payments. Yesterday, the company announced a seven per cent rise in its full-year dividend to 7.4p a share.

Chief executive Ian Livingston said: “These results show we are making progress, but we are well aware there remains a lot more to do.”

BT added 1.1 million homes to its network over the course of the year, which equates to a new connection every 30 seconds. BT said it has connected seven new homes for every one connected through Virgin Media’s cable service.

It has added 144,000 customers to its super-fast broadband service after its launch about a year ago. Mr Livingston claimed its roll-out is among the fastest in the world and by the end of this month it will be capable of providing the service for five million premises.

Some 30,000 new customers were added to its Vision broadband TV service, which offers Sky Sports 1 and 2, in its final quarter.