The cash was pulled together through a series of deep spending cuts, cutting 4% of costs across the business, and the tidy £166m it found down the back of a sofa (a large tax credit plus interest paid on its pension fund). Broadband has also helped nudge up BT’s finances as the firm’s traditional telephone business continues to decline. Those endless BT Infinity adverts are really paying off: over 131,000 broadband customers were added in the final quarter of last year.
BT chief executive Ian Livingstone had some good news for delighted shareholders this morning. Not only will they be receiving a full dividend up 12% on last year, but he plans to scale up the dividend by 10-15% a year for the next three years. Now there’s something to phone home about.
And things are looking up for staff too. BT has been pouring cash into its pension fund to help reduce the £3.9bn deficit. It has pledged £2bn to the cause, one of the largest one-off pension payments ever made by a company. This is no quick fix, however. BT reckons it will take nine years to pay the whole thing down.
With 6.3 million customers, BT is still a very big fish in the telecoms pond. And even though CEO Livingstone predicts a ‘challenging’ year ahead, with £2.5bn of free cash flow swilling around its accounts, the old British stalwart won’t be calling 999 any time soon.