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BT’s Irish arm sees 11% spike in profits

Communications firm BT has bolstered its profits across the island of Ireland by 11% over the last year.

The firm wouldn’t reveal its profit figures for its business in both Northern Ireland and the Republic, but said it boosted profitability by cutting costs and delivering on retail and wholesales contracts — despite a 3% slide in revenue to nearly £750m in a “challenging economic environment”.

BT Group as a whole, which includes the all-island business, reported a 71% rise in profits after more than £1bn of cost savings helped it overcome a 4% drop in revenues.

The bigger-than-expected improvement in full-year profits to £1.7bn was helped by the company's continued success in broadband, with the proportion of customers signing up to its own service now at an eight-year high.

BT said 252,000 customers were added by companies using BT's network, such as Sky or TalkTalk, of which 64% signed up with BT.

The retail arm grew profits by 2% to £1.34bn, while the company's formerly troubled Global Services division, which caters for businesses and governments across the world, narrowed losses to £141m.

Cost savings were higher than the £900m targeted but unlike the previous financial year, when the company saved £1.75bn, job losses were not the main driving force behind the efficiency gains.

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BT Ireland said it’s accelerating its investment in fibre to the cabinet technology (FTTC), both direct and in partnership with the public sector, to connect 89% of phone lines to a fibre cabinet within the next 10 months, “and placing Northern Ireland at the forefront of the European fibre broadband revolution”.

It is involved in delivering the Department of Enterprise, Trade & Investment’s Next Generation Broadband Project, and also helping Londonderry to become the first city in Ireland to have fibre deployed to 100% of the city’s street cabinets.

BT said it expects the group to return to underlying sales growth in 2013, while underlying profits were expected to grow for the next two years.

Shares were down nearly 2% after recent strong gains.

This was despite the pension regulator putting its review of the scheme's recovery plan on hold, which eased fears that BT could be forced to pay more into the scheme than it plans to.

Morten Singleton, an analyst at Investec, said the release was generally positive. He plans to increase his profit forecasts for the company.