BT sees IT services sales and profit slump in Q1

Telco titan posts solid quarterly numbers, but Global Services division hit by economic malaise

BT's IT services arm suffered the most as the telco giant saw sales decline in its first fiscal quarter, but the company's core retail operations ensured profitability continued to increase.

For the three months to the end of June, BT saw total group sales decline six per cent annually to £4.5bn. But EBITDA was up two per cent on the corresponding period last year and stood at almost £1.5bn.

The firm's Openreach division was the best-performing unit in terms of top line, with sales flat at just under £1.3bn. BT Retail and BT Wholesale posted revenue declines of three and eight per cent respectively. However, the Retail unit was the only segment to post a growth in profits, with EBITDA rising seven per cent to £476m.

BT Global Services was the laggard of the group, with sales slumping nine per cent to £1.7bn. The IT services division also saw its profitability eroded, with EBITDA tumbling 14 per cent year on year to £119m.

BT chief executive Ian Livingston claimed "BT Global Services was impacted by the tough conditions in Europe and the financial services sector". But, overall, the telecoms top dog painted a rosy picture of where the company is heading.

"Our financial performance allows us to keep investing for the future," he said. "Our engineers are rolling out fibre at pace, bringing fibre broadband to over two million more homes and businesses in the quarter and it is now available to more than 11 million premises.

"Our investment plans are creating about 2,000 jobs in 2012 by recruiting engineers to support our fibre plans and opening four new UK call centres. We continue to make good progress with our investments in the faster-growing economies."