British telecoms group BT delivered strong full-year profits today while easing some fears about its $10.4 billion pension fund deficit.
BT shares, having recovered in recent weeks from pension fund fears that led to a sell-off earlier this year, rose 3.4 per cent to 191-1/2 pence, putting the stock on course for its highest close in four months.
Underlying pre-tax profit rose 44 per cent to £1.829 billion sterling in the year to end-March, at the top end of forecasts. Revenue rose 2 per cent to £18.727 billion.
In March, BT reported a £6.3 billion shortfall in its pension fund, which has been hammered by three years of declining stocks.
But under the less stringent Funding Valuation from an independent actuary, which determines how much cash BT must pay to top up the fund, the pension deficit was £2.1 billion.
As a result, BT's annual cash contribution to the fund will rise by only £32 million to £232 million, far less than the £100 million increase predicted by analysts.