BT takes hit from business rates and pension charges
TELECOMS GIANT BT has revealed falling third-quarter revenues and earnings after it was hit by higher business rates and pension charges.
The group saw adjusted earnings drop 2 per cent to £1.8bn in its third quarter to December 31, while sales fell 3 per cent to £5.97bn.
BT put the declines down to increased investment in mobile devices and “customer experience”, along with higher business rates charged on its network assets as well as pension costs.
The company has previously branded business rates as “excessive”.
The group had a pension deficit of £7.9bn as at the end of December, up from £7.7bn as at the end of September.
BT is reportedly planning to close its defined benefit pension scheme to future accruals in a bid to plug a gaping funding hole. The firm said: “We continue to review the future pension benefits under our main defined benefit and defined contribution schemes in the UK, with the objective of providing fair, flexible and affordable pensions.”
On a bottom-line basis, pre-tax profits rose 25 per cent to £660m compared to the same quarter last year, when the firm took a hefty hit from an accounting scandal at its Italian division. BT said it spent another £9m in investigation costs in the first half on the scandal, which resulted in a £530m write-down and a major fall in its share price, knocking £8bn from its market value.
Chief executive Gavin Patterson said: “Our third-quarter financial results are broadly in line with our expectations and we remain confident in our outlook for the full year.
“We continue to improve our customer experience metrics across the group, with our sixth successive quarter of improved customer perception.
“We continue to work closely with the UK Government, Ofcom and our customers to expand the deployment of fibre and Openreach recently announced plans to accelerate our FTTP deployment to three million premises by the end of 2020.”