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BT makes progress but revenues dip again

Simon Quicke

BT has posted a slight dip in revenues for the second quarter in succession as its Global Services and Retail operations saw turnover drop.

For the third quarter ended 31 December the telco giant delivered revenues of £5bn, down 3% year-on-year, but delivered strongly with EBITDA up by 7% to £1.48bn and pre-tax profits rose by 30% to £531m.

BT Global Services saw its revenue drop by 7% and there was a warning that as promotions around contracts ended that decline would accelerate in the fourth quarter but then improve next fiscal year. Order uptake increased by 8% to £1.7bn, helped by some large contract wins including Gala Coral.

Revenue at BT Retail decreased by 3%, which clawed back on the 4% drop in Q2, but the highlight was the first growth in business revenue for two years, driven by increasing take-up of IT services. Operating profit in the division increased by 7% to £342m.

The performance of BT Wholesale was pretty flat with revenue unchanged at £1bn and operating profit increasing by 7% to £176m. Declines in broadband revenue were offset with improvements in the take-up of its managed network services.

During the quarter BT also inked a contract with KCOM Group to provide the VoIP services to its SME customers across the UK.

Ian Livingston, CEO at BT Group, said that it was a good quarter and Global Services would be cash flow positive this year, 12 months earlier than targeted.

"These results show that we are making progress on a number of fronts. There is always more to do but our performance underpins our outlook for this year and the period to 2012/13," he said.

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