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Thursday, 25 July, 2002, 14:11 GMT 15:11 UK
BT shares fall on slower sales
UK telecoms giant BT has unveiled a jump in profits, crediting tighter cost controls and improved efficiency.

Last year, under pressure from investors worried about the company's burgeoning debt, BT cut jobs and sold off some of its overseas acquisitions, putting its global ambitions on hold.

This policy now appears to have paid dividends with the company announcing on Thursday that pre-tax profits for the three months to late June reached 322m ($450m), 61% up on the same period last year.

The increase in profits came despite a slower-than-expected 2% rise in sales, reflecting flattening capacity demand from other telecoms operators.

Investors disappointed

BT chief executive Ben Verwaayen attributed the company's improved performance to leaner business practices.

"The improved efficiency in our business delivered strong profit growth," he said.

But the company's stronger bottom line cut little ice with investors, who chose instead to focus on its poor sales performance.

In the City, BT shares were marked down 20p, or 9.4%, at 191 pence in mid-afternoon trade, erasing earlier gains.

Debt progress

BT said on Thursday that it had reduced its debts by a further 304m during the period to 13.4bn, down from nearly 30bn less than two years ago.

BT ran up huge debts during a late 1990s acquisition spree, and borrowed further hefty sums to fund the purchase of new generation mobile telecommunications licenses.

The company added that subscribers to its ultra-rapid 'broadband' internet services had edged past the key 300,000 mark for the first time.

The company's latest results reflect its new strategy of cutting costs while boosting broadband business, announced earlier this year.


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