BT Group Plc has acknowledged that its three-year target of revenue growth of 6% to 8% is unlikely to be achieved in the present economic environment. However, the UK-based incumbent is still basking in market approval with a sharp improvement in bottom-line performance that owes much to the cut in the company’s debt burden.
Chief executive Ben Verwaayen said he is now pinning his hopes for revenue growth on new initiatives such as broadband services and the company’s focus on information, communications and technology services.
In the second quarter to September 30, net income rose 60.7% to 331m pounds ($519.7m) on revenue up 2.3% at 4.6bn pounds ($7.2bn). At the mid-term stage, net income rose 82% to 546m pounds ($857.2m) on revenue up 2.1% at $9.2bn ($14.4bn).
As Europe’s first privatized carrier, BT has led the continent both in its mistakes (an over-ambitious overseas expansion left it mired it debt) and its recovery program. Deutsche Telekom AG and France Telecom SA have followed its example in ousting the management responsible for their problems, but have yet to get to grips with their debts.
BT is still burdened by a 295m pound ($463.1m) interest charge for the quarter, but this is an improvement of 57m pounds ($89.5m) and the company is rubbing its hands at the prospects of the imminent arrival of 2.5bn pounds ($3.9bn) from the sale of its stake in French operator Cegetel.