BT profit climbs, confirms outlook

29th Jul 2010 07:36

Telecoms leviathan BT reported a 17% rise in pre-tax profits in the first quarter and reiterated its full year outlook.The firm also said that it is in talks with the government over plans to cut public spending."The UK government's recent announcement of spending cuts represents both opportunities and challenges and we are actively engaged with the UK government in this regard," it said.Adjusted pre-tax profits rose to £446m in the quarter ended 30 June compared with £382m last time. Revenue dropped to £5.01bn from £5.24bn previously, in line with forecasts.The group reduced operating costs by £291m and said net debt was down by more than £1.6bn to £8.9bn.Chief executive Ian Livingston said: "Despite the challenging environment, these financial results underpin our outlook for the full year." BT's pension funding deficit valuation at 31 March was around £6.6bn, a reduction on the position at 31 December 2008 of £9bn.Last week telecoms regulator Ofcom ruled out changes to BT's funding that would have allowed it to raise wholesale prices to help close the huge deficit in its pension fund. The telecoms giant had wanted to put wholesale prices up by 4% to help plug the deficit in its pension scheme. Ofcom said that after a period of consultation there was no 'compelling evidence' to change the way it takes BT's pension costs into account when setting regulated charges.