British telecoms group BT said today it had cut debt below target and resumed dividend payments as it reported year profit ahead of expectations in the former monopoly's first results since a deep restructuring.
The firm reported pre tax profits of £1.273 billion sterling in its year to end March, slightly above analysts' forecast range of £900 million to £1.25 billion but down 28 per cent on the year-ago period reflecting the new, slimmed-down BT Group.
BT Group Plc has transformed itself from a global fixed-line and wireless player and adopted a more domestic focus by selling foreign holdings, floating its mobile arm and shutting down its Concert venture with US giant AT&T.
Shares in BT jumped six per cent to 272p in early business as the stock market welcomed the figures.
The firm said it would recommend a final dividend of two pence per share - the first paid since November 2000.
It said it had cut debt to £13.7 billion by the end of March from £27.9 billion - below its target range of £15 to £20 billion - as it reaped rewards from the demerger of its mobile arm mmO2, the sale of foreign interests and a huge £5.9 billion rights issue.
BT is seen as having taken tough action to restore its finances while European rivals such as Deutsche Telekom and France Telecom are still struggling to lower their own debt mountains.
BT Group said it had connected 170,000 broadband subscribers by end-March through its BT Wholesale unit. Verwaayen wants to increase that to one million by next summer and five million by 2006.
High-speed, always-on Internet access through phone lines is at the heart of BT's plans for growth as its retail unit struggles with competition from cable in the traditional fixed home phone line market.
BT hopes broadband will account for nearly one third of the £1.5 billion it aims to generate in additional group earnings in the 2004/2005 financial year.