BT's half-year profits down 31 per cent<br/>

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BT today published its results for its second quarter and half year, showing revenue of £5.1 billion and £10.1 billion respectively, an increase of three per cent on the same periods a year ago.

But the relatively rosy revenue figures were overshadowed by fiancial gloom elsewhere as the communications giant shouldered a 31 per cent drop in pre-tax profits after special items for the period ending 30 September, thanks largely to the £182 million incurred by its ambitious transformation programme which is tipped to set the company back some £450 million in total. As a result profits for Q2 shrank from £629 million a year ago to £435 million.

Taking into account the first quarter, the last six months have seen profits drop by 17 per cent in total compared to the first two quarters of 2006, with the company shedding staff as it continues to butterfly away from its history as just a traditional telco.

Despite the drop in profits, BT's chief executive Ben Verwaayen decided to focus on the positive and how actions carried out during the last three months will bear fruits in the future. "We are achieving significant transformation of our business which will deliver further efficiencies alongside faster, better, smarter services for our customers," he said.

"During the first half of the year we have made a number of acquisitions, both in the UK and overseas, to increase the breadth and depth of the services we offer our customers. These include Comsat International in Latin America, i2i in India and Brightview, Basilica and Lynx Technologies in the UK."

Verwaayen also used the results release as an opportunity to welcome Sir Michael Rake as the company's new chairman. "His dynamism and vision will help us succeed as we move through BT's transformation," he said.

The Communication Workers Union (CWU), which has been consulting with BT on its ambitious transformation plans, reacted positively to the results.

"This is a positive set of results," said Jeannie Drake, the CWU's deputy general secretary. "We're in detailed consultation with BT on a regular basis on its transformation programme. BT needs to become a successful software services provider with high standards of customer service if it's going to achieve sustained commercial success and provide sustainable jobs. These results confirm that it is heading in the right direction."

Drake added: "BT has been recruiting significant numbers of front line staff and apprenticeships over the last year and we have an assurance that there will be no compulsory redundancies in CWU represented grades. A big challenge however is going to be reskilling and retraining the workforce over the next few years."

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