By Kate Holton
LONDON, July 25 Outgoing BT boss Ian
Livingston is set to leave on a high note after results that
carried all the hallmarks of his five years at the telecom
operator's helm, with costs down, profits up and investment in
place for the future.
His successor, head of retail Gavin Patterson, will step
into the chief executive role with the company's stock trading
near a six-year high after a recovery from the two major profit
warnings Livingston delivered at the start of his tenure.
On Thursday the 167-year-old former state monopoly posted a
trading update for the three months to the end of June showing
adjusted profits up 5 percent despite lower sales, helped by
demand for fibre broadband and early bookings for the group's
new sports TV service, Livingston's two major projects.
With revenue down just 1 percent compared with a 5 percent
drop a year ago, the country's largest fixed-line operator is on
track to return to growth in the next couple of years after four
straight years of shrinking revenue.
"The nadir of the March 2009 share price (72p) is now a
distant memory and the recovery in BT's fortunes continues
apace," Richard Hunter, the head of equities at Hargreaves
Lansdown Stockbrokers, said of the stock that now trades at 340
"As the company has reinvented itself, it has become a more
modern, streamlined and focused entity whose prospects remain
Having removed millions of pounds of costs in the last three
years, Livingston has been able to invest in a new superfast
fibre network and a sports service that it hopes will draw in
more customers and persuade them to pay more.
The move will pitch BT in direct competition with the
country's largest pay-TV group BSkyB which is 39-percent
owned by Rupert Murdoch'S 21st Century Fox.
It is also designed to reduce the amount of subscribers who
defect to take their broadband and telephony from BSkyB.
BT said on Thursday that more than half a million customers
had signed up to take the service, and that its consumer line
loss was at its lowest level in five years.
It added 197,000 retail fibre broadband customers, taking
its total to around 1.5 million, and it hopes this growth rate
will stay strong as users opt to take the faster broadband
service to watch the new TV service.
It also said it had seen signs of higher demand from small
and medium-sized companies and a 50 percent jump in its total
order intake for the Global Services division which handles the
IT needs of multi-national organisations.
"These are another set of solid numbers," Livingston told
reporters. "It is very early days but the (sports additions) are
better than expectations.
"I am immensely proud to have led BT over the last five
years. The foundations are in place for an exciting future and
I'm confident that BT will make even more progress under Gavin's
leadership and our talented team."
Livingston leaves in September, to work for the government.
Shares in the group, which fell on the news of his departure in
June, were down 1.8 percent on Thursday.
$1 = 0.6512 British pounds)