BT issued a surprise profit warning this morning and saw its share price tumble by almost a fifth as a result.
The telco announces results for the third quarter on 13 November. But it told the Stock Exchange this morning that although revenues had grown in line with expectations, profits have missed targets, especially in BT Global Services.
Global Services grew revenues by 15 per cent but Ebitda is below expectations at £120m. The firm blamed a decline in high-margin UK business and the non-arrival of expected efficiency savings for the shortfall.
The rest of BT - Retail, Wholesale and Openreach all brought in revenue growth on target. Overall the group expects revenues to have grown faster than expected but earnings per share to be slightly below expectations.
BT's newly appointed chief executive, Ian Livingstone, who took over from Ben Verwaayen in the summer, said: "BT is performing in line with or ahead of expectations in all but one of its divisions, so the results in BT Global Services are particularly disappointing. We acknowledge that the performance in this part of the group is unsatisfactory and are committed to taking decisive action to rectify the situation."
The company announced an interim dividend of 5.4p - down slightly on last year.
BT shares were trading at 115p, down 27p or 19 per cent. The FTSE 100 was down 1.3 per cent.
The full statement is here.
The boss of BT Global Services has fallen on his sword after the company announced it had missed profit targets for the division. Francois Barrault quit as chief executive of the division and as a member of BT's board. His place will be taken by chief bean counter, group finance director, Hanif Lalani. Ray Leclercq who is currently CFO at Openreach becomes new chief finance officer. A new group finance director will be announced shortly.
Full RNS statement on board changes is here.®