Investors reassured by BT results

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BT shares rose as the group posted better-than-expected sales for the first three months of 2008 as boss Ben Verwaayen prepares to step down.

The group said revenue rose 2% to £5.4bn, lifted by growth in its broadband and software services.

Mr Verwaayen, who leaves his post on 31 May after six years, said BT had finished the year "in style".

The departing boss is credited with transforming BT's fortunes by building it into a global communications firm.

Mr Verwaayen will be replaced by Ian Livingston, who is currently head of BT's retail arm.

Good foundations

The group reported an 18% decline in pre-tax profits to £494m over the first quarter of 2008.

But excluding costs incurred from restructuring its business, BT earnings were up 2% to £1.57bn.

It recommended a full-year dividend of 15.8p per share, up 5% from last year.

"I am confident that we have the right strategy and people in place to continue to deliver value for our shareholders and expect to increase dividends per share in 2008/09," said Sir Michael Rake, BT chairman.

The market welcomed the news, and BT shares rose 6 pence, or 2.5%, to 228.8p in London.