BT beats full-year expectations

LONDON: British telecoms provider BT beat market expectations for its full year with a 2 percent decline in revenues, and forecast a return to growth in 2012/13.

Britain's biggest fixed-line telecoms provider said on Thursday it would invest an extra 1 billion pounds ($1.5 billion) to extend its rollout of high-speed fibre to about two thirds of Britain's premises, and also invest in TV.

Revenues for the year to end-March were 20.9 billion pounds, ahead of an expected 20.7 billion, and BT said it expected the trend to keep improving with 2010/11 revenues seen at about 20 billion.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were 5.78 billion pounds, also ahead of expectations. BT said it saw a similar EBITDA level this fiscal year after leaver costs.

The company said it would pay a final dividend of 4.6 pence, giving 6.9 pence for the full year, and would pay progressive dividends over the next three years.

Analysts had expected revenue of 20.7 billion pounds, EBITDA of 5.6 billion pounds and a dividend of 6.88 pence, according to Thomson Reuters I/B/E/S StarMine SmartEstimates, which weights estimates according to analysts' past accuracy.

"The turnaround is definitely in full gear now," said analyst Mike Kovacocy of Daiwa Securities. "They're getting very close to actually growing the business again."

BT has been plagued by underperformance at its enterprise IT services division Global Services, and a huge pension deficit.

On Thursday it said Global Services should turn cashflow positive in 2011/12. Its net pension position at March 31 was 5.7 billion pounds net of tax.