Cost-cutting drive at BT set to boost profits and dividend
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UPDATED:
21:03 GMT, 5 May 2012
BT is set to report a sharp rise in profits to 2.4billion as the telecoms giant continues to cut costs.
Profits boost: BT tower in London
Though turnover is likely to be down 3.7 per cent to 19billion, profits are set to have risen 40 per cent according to Jefferies investment bank.
Cost-cutting has played a key role in boosting profits, and chief executive Ian Livingston is expected to say that there are more cuts to come, with savings of 565million expected this year.
BT, with more than 100,000 employees,
is likely to recruit fewer staff than the 5,000 it loses through
natural wastage this year. Its team of 30 in-house consultants work with
finance director Tony Chanmugam to identify bottlenecks in
organisation.
Livingston is expected to increase
the annual dividend to 8.5p a share from 7.4p last year. However, the
City expects him to give guidance that he will greatly increase the
dividend soon, with 12p a share likely for 2013.
Investors will be watching for signs
of further recovery at the Global Services division, which led to BT
announcing a series of profits warnings in 2008-09 after overestimating
the profitability of a series of key accounts.
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