Thursday, 31 July 2008

BT Global Services Q1

BT has released its Q1 (to 30th June 08) results which sent their shares diving (down 11% at 175p as I write). This was because a straight 4th consecutive quarterly profit decrease and a warning of profit margin pressure at BT Global Services. See BT slumps most in eight years from Bloomberg.

Revenues from BT Global Services increased by 13% year on year (or around 8% in constant currency) to £2.05b; the highest quarterly growth for over two years. This was driven by strong performance outside the UK, where revenue growth accelerated to 33%. However, these figures include acquisitions (of which BT GS has made quite a few). I'll try to get the organic results for you if possible. Of BT GS's £2.05b Q1 revenues, 46% or £952m relates to Networked IT Services - the closest BT Global Services gets in its breakdown to what we would call IT Services (the rest is line and circuit charges etc.) This segment grew 15% (c10% in constant currency - less organically). Total orders increased by 12% to £1.9b which included a seven-year outsourcing deal with Nationwide Building Society to manage its networked IT services and a five-year contract worth $650m with Procter & Gamble (P&G) to provide and manage P&G's local and wide area network infrastructure across more than 1,100 locations in more than 82 countries.

BT says it "expects to see continued strong revenue growth in BT Global Services but EBITDA margins may fall slightly in 2008/9 in part due to currency movements. However, we remain committed to achieving the 15% EBITDA margin target".

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