BT Issues Profits Warning, Announces One-Off £340 Million Loss

BT (NYSE: BT) has issued a profits warning after suffering losses in its Global Services division and announced a one-off charge against profits of around £340 million due to the on-going review of the company’s finances and contracts. And it may not be the last “one-off” charge — BT says it could make more non-cash charges when the reviews are completed in Q409.

Global Services was given a new management team following disappointing Q208 results when it failed to make a profit despite winning £1.8 million in contracts worldwide. That division, currently the subject of review of its 17 contracts of its cost efficiency, is making up the lion’s share of the 10,000 full-time and temporary redundancies currently being made across the group.

The company expects to report revenue growth of 15 percent in its Q309 results, due on February 12, thanks to favourable currency exchange rates, acquisitions and orders of £1.8 billion taking the 12-month order list to £8.3 billion. The company’s retail, wholesale and openreach divisions are all expected to post results ahead of expectations for Q3 with EBITDA five percent up year on year. In Q2 BT made £5.3 billion revenue, up four percent on Q1, although its pre-tax profits of £590 million were down 11 percent on the same period last year.

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