A string of exceptional charges have left a £750 million sterling hole in British Telecommunications Plc's half-year profits but the group said yesterday its underlying business remained sound. However, BT declined to comment on the subject closest to analysts' hearts - how it plans to salvage its global expansion plans after agreed merger terms with America's number two long-distance carrier, MCI Communications, were trumped by two counterbids.
Stripping out a £510 million charge for a government-imposed windfall tax on earnings, BT posted second quarter pre-tax profits of £688 million, down from £730 million last time.
Half-year pre-tax profits fell to £1.57 billion from £1.6 billion last time on a 5.2 per cent rise in turnover to £7.75 billion.
After adjusting for a 35p special dividend, the half-year dividend slipped to an expected 7.55p from 7.9p.
BT said it expected to continue to cut back jobs this year. Around 3,000-4,000 staff are likely to go at a cost of around £100 million.
Although the results beat most analyst expectations, BT's shares slipped 8.5p to 453p in mid-morning trade.
