BT turnover growth slows

LONDON, July 25 (Reuters) -- Improved efficiencies helped former British telecoms monopoly BT Group Plc to report a 61 percent leap in first quarter pre-tax profit on a two percent rise in turnover on Thursday, as growth in the depressed sector remained flat.

"Overall turnover growth of two percent was slower than expected with no growth in sales to other telecoms operators. However, the improved efficiency in our business delivered strong profit growth,'' Chief Executive Ben Verwaayen said.

"We remain committed to our targets and are confident for the future,'' he added in the results statement.

Pre-tax profit before exceptionals rose to 322 million pounds ($506 million) in the quarter ended in June, on turnover of 4.587 billion pounds. The profit figure was ahead of some analysts' forecasts, but turnover fell short.

Although BT's operating profit performance was much weaker, down 18 percent at 570 million pounds, sharply lower interest payments boosted its pre-tax profits.

BT shares, hammered over the past few days amid an overall market meltdown, were indicated 3-1/2 pence higher at 214-1/2 pence in pre-market dealings.

Early in 2001, BT stole a march on other heavily indebted former monopolies around Europe by massively restructuring its business to more than halve a 30 million pound debt pile.

France Telecom, wrestling with 60 billion euros of debt, announced on Thursday the sale of broadcast unit TDF to raise 1.6 billion euros ($1.6 billion). Deutsche Telekom, its opposite number in Germany, faces a similar challenge with its 67 billion euros in debt.

But for BT, having shut down its U.S. Concert joint venture, floated its mobile business, issued a huge amount of new shares and divested foreign assets, net debt now stands at 13.4 billion, down 304 million pounds in the last quarter alone.

In the first quarter of BT's new focus on selling high-speed Internet access into British households, the company said it had signed up more than 300,000 broadband end users. Verwaayen has said the group is adding around 12,000 users per week, on the way towards a target of one million by next summer.