FY05 financial results & events

“The financial results for the full year reflect the continuing strong trends that we have seen during the year. New wave revenues have grown by 32 per cent to £4.5 billion and now represent nearly a quarter of our business. Earnings per share before goodwill amortisation and exceptional items of 18.1 pence have more than doubled over the past three years. We have again generated free cash flow of more than £2 billion and reduced net debt to below £8 billion, a level with which we are comfortable. Net debt is now more than £20 billion lower than in 2001. The transformation of our business is reflected in our financial results.

“I am particularly pleased to announce a full year dividend of 10.4 pence per share, which is 22 per cent higher than last year. This shows our continued commitment to improving shareholder returns whilst building for the future.”

“Our transformation strategy has now delivered underlying revenue growth in four consecutive quarters, a significant milestone. We have seen new wave growth of 35 per cent.

“Broadband DSL connections were more than 800,000 in the quarter, a new connection every 10 seconds of every day. We expect to achieve 5 million broadband DSL connections a year ahead of target.

“Our global ICT presence is building strongly and our Global Services revenues grew by 10 per cent in the quarter. “Earnings per share before goodwill amortisation and exceptional items grew by 9 per cent to 4.8 pence.

 “These results justify the confidence we have in our strategy which is transforming BT and delivering long-term growth in shareholder value.”

“The group is making exciting progress, delivering strong financial results whilst transforming the business. I am very pleased to report that we will be paying an interim dividend of 3.9 pence per share, 22 per cent higher than last year.

“We continue to invest in our business at a rate well above others in Europe. This investment, together with our continuing research and development programmes, are helping BT take a world leading position.”

“The transformation of our business continues at pace. This is the second consecutive quarter of underlying growth in turnover. New wave turnover, including ICT, broadband, mobility and managed services grew by 32 per cent to £936 million. New wave businesses generated over 20 per cent of group turnover in the quarter. This strong growth in new wave has offset the decline in turnover from the traditional business and these results reflect a continuation of recent trends.

“Earnings per share before goodwill amortisation, exceptional items and leaver costs grew by 10 per cent to 4.6 pence.

“Our 21st Century Network (21CN) programme team have announced a number of customer trials with large scale roll out expected in 2006.

“Whilst the environment remains challenging we are confident in our strategy to deliver long-term growth for shareholders.”