Cost cutting by British Telecom looks to be paying off, with operating profit and EBITDA increasing year-on-year in calendar 1Q – the operator’s fiscal 4Q – despite declining revenue.
The telco grew operating profit 24% year-on-year to £849 million (€1 billion) and EBITDA 10% to £1.5 billion in fiscal 4Q, despite a 4% fall in revenue. Figures for the full year to end-March paint a similar picture, with operating profit up 13% and EBITDA 6% year-on-year, while revenue fell 6%.
Chief Ian Livingston predicts the firm will continue to grow profits over the next two years, and tips free cash flow to hit at least £2.4 billion in 2014. He pledged to maintain the telco’s “prudent financial strategy” of long-term investment, backing a company pension scheme, reducing debt and boosting shareholder returns, in the face of economic and regulatory headwinds.
“We have made progress again this year delivering for all our stakeholders, but we know there is more to do,” Livingston notes.