Revenues at BT Ireland dip 3% to settle at £388m

REVENUES AT BT’s Irish subsidiary fell 3 per cent to £388 million (€433 million) in the first half of the year, it said yesterday.

BT Ireland, which provides telecoms services to business customers and builds and manages networks, said yesterday that its operations made “excellent progress” in the six months to September 30th.

The company said revenues were down 3 per cent at £397.8 million in the six months ended September 30th, the first half of its financial year.

However, BT added that sales trends improved in the final three months of that period.

Chief executive Chris Clark said the company cut labour costs by 20 per cent during the period by cutting back on contractors and rates and through other savings and a wage freeze. Its parent yesterday reported that it had taken 16 per cent off its wage bill.

According to a statement, earnings before interest, tax and write-offs were up 21 per cent. But it did not say what its earnings were, as it does not give detailed figures for the Irish market. Similarly, it said gross margin – the difference between revenues and cost of sales – improved by 7 per cent.

BT is concentrating on providing services to businesses and the public sector, and providing wholesale services to other telecoms companies.

Earlier this year, the company transferred its small business and consumer division to Vodafone.

It is continuing to develop a network in the Republic. It has its equipment in 22 Eircom exchanges, and is hoping to have it in 60 of these locations, giving it access to 65 per cent of the population by next March.

Access to the exchanges in turn gives it direct access to connections linking customers to the network, allowing it to offer more and cheaper services.

Its parent, BT, yesterday reported that the once-off impact of redundancy payments contributed to a 44 per cent fall in pre-tax profits to £275 million in its second quarter.

The trading decline in global services widened losses by 45 per cent to £96 million in the three months, after revenues fell by 3 per cent to £1.02 billion.

However, the group’s cost-cutting initiatives have allowed it to increase its cash-flow predictions. BT cut £900 million in its first half and expects total savings for the year to be £1 billion.

The company said that it expects to generate a cash flow of at least £1.6 billion this year, compared with a previous forecast of more than £1 billion.

BT was forced to restructure at the end of the last financial year after reviewing the global services division, a supplier of IT services to multinational firms, which had been touted as the growth engine. It announced new spending and cost-saving targets in May after two profit warnings at the division prompted a massive writedown, a dividend cut and 15,000 layoffs. – (Additional reporting: PA, Reuters, Bloomberg)