Ousted boss insists BT is on the mend
OUTGOING BT boss Gavin Patterson insisted the telecoms giant was back on its feet as he prepared to hand over the reins to his successor.
The 51-year- old said an overhaul he launched this year before losing his job had gathered momentum, while strong demand for Apple’s new iPhone lifted mobile division sales.
It helped BT to a rise in underlying profits that caught analysts by surprise, sending shares surging by as much as 11pc.
However the gains were against a backdrop that has seen shares halve under Patterson over the past three years, while it also admitted more trouble was on the horizon for its pension fund.
Ahead of his departure as chief executive, Patterson sought to draw a line under recent turmoil which has included an accounting scandal in Italy, a massive pensions black hole, battles with regulators and heavy criticism of its broadband network.
He said the problems had given him a chance to tackle ‘sacred cows’, and BT now had the building blocks for the future.
Patterson, who will be succeeded by Philip Jansen on February 1, added: ‘We continued to generate positive momentum in the second quarter, resulting in encouraging results for the halfyear. We are delivering against the pillars of our strategy.’
In the past two years Patterson has struck a deal with unions to slash the pension deficit and agreed a content- sharing deal with Sky to stop football TV rights costs soaring further.
Most significantly, a turnaround plan will see BT slash around 13,000 jobs – but he was ousted in June by shareholders.
Yesterday, he said the overhaul had started well, with 2,000 staff gone already. Big strides had been made in customer service and a scheme to roll out cuttingedge broadband across the UK.
Patterson, who has been boss for five years, said: ‘We’re well on track, and I’m looking forward to handing over to Philip with a positive momentum.’
BT said underlying earnings rose 2pc to £3.7bn in the first half, and expected full-year earnings at the upper end of its forecast, up to £7.4bn. It booked a 2pc dip in revenue to £11.6bn.
George Salmon, an analyst at Hargreaves Lansdown, said: ‘BT is starting to look more stable. The pension deficit is coming down and investment requirements should flatten out.’