BT’s Global Services Unit has become a cash generator for the company. The unit, which provides managed networked IT services to the public sector and major companies, struggled between 2008 and 2009, in part because of problems with BT’s national NHS IT contracts.
This morning, however, BT announced a 71% increase in annual net profits to £7.billion. It said a significant part of the increase was down to the high costs of restructuring Global Services in 2010 and to dealing with a pensions crisis.
The restructuring helped Global Services to deliver a cash flow of £119m for the 2010-11 financial year. Its orders have also increased by a 10% to £7.3 billion for the year.
However, revenue decreased 5% from £8.5 billion to just over £8 billion. BT’s overall revenues for the year fell 4% to £20 billion.
Chief executive Ian Livingstone said: “We expect to continue to grow our profits and free cash flow whilst investing to return BT to growth. These results show we are making progress, but we are well aware there remains a lot more to do.”
The company has also drawn attention to the performance of Openreach, which saw growth in its copper line base. Livingstone said BT’s roll out of super-fast broadband is now one of the most rapid in the world, passing an average of 80,000 additional premises each week.
Access to personal health applications is one driver of broadband growth. The government has also stressed the importance of superfast broadband connections to delivering telehealth services across the country.