|
||||||||
  |
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||
BT CEO: Target 'wasn't smart'
LONDON, England (CNN) -- BT Group, Britain's dominant phone operator, was forced to backtrack on an aggressive three-year revenue target, even as it returned to profit. BT Chief Executive Ben Verwaayen set the 6 to 8 percent growth target earlier this year -- but analysts were doubtful the former monopoly would meet that target. The company's stock was hammered last week as it became apparent it would retract earlier targets. "Although the three-year revenue target ... is unlikely to be achieved in the present market conditions, we expect total revenue growth for the second half to be in line with current market expectations,'' said Verwaayen. He told CNN that in hindsight "maybe the target wasn't smart but we don't have to grow 6 to 8 percent to boost our bottom line. We will continue to focus on debt reduction and customer satisfaction." Verwaayen set the targets as he went about restoring one of Europe's biggest telecom groups back to profitability. He took over after three top executives at the group were forced to leave as an international expansion left the company struggling with debts of about £30 million ($42 million). BT (BT) has shut down its U.S. Concert joint venture, floated its mobile business, issued a huge amount of new shares and divested foreign assets to reduce its debt pile to about £13 billion. It also introduced a new strategy of signing up one million households to its high-speed Internet access service by next summer. Net income came in at £315 million in its second-quarter ending September 30, an improvement on the £1.48 billion loss recorded in the same period a year ago, the company said on Thursday. BT's decision to cut debt has meant interest charges have been slashed, enabling the company to make a profit. But revenue rose 2 percent to £4.66 billion, at the bottom end of analysts forecasts ranging from between £4.65 billion and £4.7 billion, Reuters said. And analysts were not fussed that the company had reined in their sales target. "We believe these are strong results from BT and that they should be well received by the market... there is more to BT than revenues. We believe these results from BT confirm that view," Chris Alliott, a telecoms analysts at Nomura, wrote in a note to investors. He recommended investors buy the stock and has a 6-month price target of 240 pence. It's stock, which has fallen by a quarter this year, rose 10 pence, or 5.3 percent, to 198.25 pence in midday London trading on Thursday. Pretax profit rose to £496 million in the three months to September, while earnings before interest, tax, depreciation and amortisation (EBITDA) after costs increased by seven percent to £1.47 billion, compared with analysts' forecasts between £1.35 billion and £1.43 billion. Net debt fell £285 million to £13.1 billion in the quarter, and is expected to drop sharply once the £2.5 billion sale of its stake in France's Cegetel was completed, BT said. Verwaayen said the come would aim to reduce its debts below £10 billion in three years.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
