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Last Updated: Thursday, 19 May, 2005, 16:17 GMT 17:17 UK
Broadband helps buoy BT profits
BT office
BT has enjoyed a surge in new broadband customers
BT has thanked a doubling in new broadband customers over the past year for a 20% rise in its annual profits.

For the year to 31 March, it made pre-tax, post-exceptionals profits of 2.3bn ($4.2bn), up from 1.9bn for the previous 12 months.

Annual turnover was up 1% at 18.6bn, but turnover at its "new wave" division, which accounts for one quarter of its business, was up 32%.

For the fourth quarter, BT saw a 35% rise in profits to 570m.

Quarterly turnover was up 2% to 4.9bn.

Fixed-line decline

This strong growth in its broadband internet operations is offsetting the decline in revenues at its traditional fixed-line operations, which fell 9% across the year.

We are delivering value through transforming the business and are confident our strategy will continue to deliver value
BT chief executive Ben Verwaayen

BT is now making one new broadband connection every 10 seconds.

BT has enjoyed growth for the past five quarters in a row.

"These are great results and we expect to see the overall revenue trends continuing," said BT chief executive Ben Verwaayen.

"We are delivering value through transforming the business and are confident our strategy will continue to deliver value."

BT's results came in at the top end of market expectations, and its shares rose by 8% - making it by far the strongest performer on the stock market on Thursday.

"A solid set of numbers," said Nomura analyst Chris Alliott.

Official figures from the Office for National Statistics show that over the past year, the UK's total broadband connections have increased by 84.4%, and now make up 47.6% of all internet connections.

By contrast, dial-up or narrow band internet connections have fallen by almost one-quarter to 52.4% of internet connections.

Shares in BT closed 12.75 pence, or 6.34%, higher at 214p.

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