BT SAYS SORRY TO INVESTORS
BT CHIEF executive Ian Livingston yesterday apologised to shareholders after an “unacceptable performance” by BT Global Services (BTGS) forced the firm to cut its dividend for the first time in eight years.
Writedowns of £1.3bn against BTGS, which supplies IT services to multinational companies, drove a loss of £134m in the year ending March 2009 – despite BT’s retail, wholesale and Open Reach divisions performing well.
The telcoms giant slashed its full year dividend by 59 per cent to 6.5p, and said it plans to cut 15,000 jobs this year – in addition to the 5,000 that went last year.
But BT was keen to reassure that a mixture of cost saving and restructuring would lead to 2009-10 being a “year of delivery”, and that all redundancies will be voluntary.
“It has been a very difficult year and yes, I apologise to shareholders,” said Livingston. “But we absolutely will take (BTGS) forward and do the right things.”
BT said that it will focus on margins at BTGS – which posted an 86 per cent drop in fourth quarter earnings, despite growing its revenues by six per cent. BT gave a confident outlook for 2009-10, expecting to have in excess of £1bn free cash flow. It also said it has agreed with trustees to increase its annual pension contributions to £525m.
BT shares closed down 6p at 88.4p.