Esat BT profits a pleasant surprise

ESAT BT surprised investors with higher-than-expected profits, driven by growth in demand for high-speed broadband services.

BT said its transformation from a traditional fixed-line operator accelerated in the three months to June 30, with “new wave” technology now accounting for 20% of revenues.

It also celebrated a second consecutive quarter of underlying revenues growth, up 1% to £4.57 billion after turnover from services such as broadband and voice data technology rose 32% to £936 million.

Pre-tax profits for the three-month period were £434 million - higher than the £410 million forecast by analysts.

But a decline in demand for fixed-line services meant this result was still 13% lower than a year ago when BT reported profits of £501 million.

Chief executive Ben Verwaayen said: “whilst the environment remains challenging we are confident in our strategy to deliver long-term growth to shareholders.”

Net debt - which once hit £30 billion - was lowered by 7% during the three months to £8.32bn.