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BT posts 42% drop in pretax profit after Italian accounting scandal

In January, BT reported a £530m black hole in the accounts of its Italian business

Josie Cox
Business Editor
Friday 28 July 2017 08:57 BST
Comments
Beyond that one off charge, BT’s results looked solid
Beyond that one off charge, BT’s results looked solid (Reuters)

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BT posted a 42 per cent drop in profit before tax during the first quarter of its financial year on Friday, hurt by settlements relating to a massive accounting scandal that came to light earlier in the year.

The telecoms giant reported first quarter pre-tax profit fell to £418m, which was well below the average estimate of £751m, according to Reuters. Basic earning per share fell by 51 per cent to 2.9p.

In January, BT reported a £530m black hole in the accounts of its Italian business. On Friday it said that it had settled a warranty claim with Germany’s Deutsche Telekom and France’s Orange, relating to that.

The revealing of the scandal, which also promoted the group to cut its earnings forecast, wiped around £8bn off BT’s share price earlier this year.

Beyond that one off charge, BT’s results for the quarter to the end of June looked solid.

Revenue and core earnings came in broadly in-line with forecasts.

It reiterated its outlook for the full year and said that EE had grown its contract subscribers by 210,000. It also recorded 170,000 net fibre additions in its broadband business.

“BT has delivered an encouraging performance in the first quarter of the year,” said chief executive officer Gavin Patterson.

“We’ve made good progress in our key areas of strategic focus: deliver great customer experience, invest for growth, and transform our costs. In particular, I’d highlight the growth achieved by our consumer facing businesses, helped by mobile.”

Additional reporting by news wires

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