BT shares slump on profit warning

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BT has issued a profit warning, due to poor performance in its global services unit, sending its shares 19% lower.

Francois Barrault, the head of the global services division has resigned. Finance director Hanif Lalani is set to take his place.

The division's results "are particularly disappointing," group chief executive Ian Livingston said.

The firm said quarterly earnings for the division of some £120m would be "significantly below expectations".

Mr Livingston said: "We acknowledge that the performance in this part of the group is unsatisfactory and are committed to taking decisive action to rectify the situation."

Mr Livingston said the firm would accelerate plans to implement cost efficiency plans for the division.

A note from Cazenove analysts said: "Given current stock market conditions, sentiment towards BT is likely to remain depressed for some time and hence we move to underperform.

"Investors are likely to be concerned over the risk of a rapidly deteriorating UK economy impacting BT's future operational performance."

And the pension scheme's funding position "looks to have deteriorated sharply in recent months," it added.

Shares in the firm closed 27p lower at 115.1p.

BT will provide half-year results on 13 November.