Ian Livingston set to leave BT on high note

Ian Livingston's final trading update confirmed the progress during his five years in charge of BT. Picture: PA

His successor, head of retail Gavin Patterson, will step into the top role with the stock trading near a six-year high after a recovery from the two major profit warnings Livingston delivered at the start of his tenure.

Having removed millions of pounds of costs during the past three years, Livingston has been able to invest in a “super-fast” optical fibre network and a sports service that it hopes will draw in more customers and persuade them to pay more.

Moving into sports television is pitching BT into a head-to-head competition with BSkyB, which was due to unveil its full-year results this morning.

Livingston, who is leaving to join the House of Lords and became a trade minister with the UK government, said: “These are another set of solid numbers.

“It is early days but we are very pleased with the strong start in BT Sport. More than half a million households have now ordered and that’s before the channels have even launched.” He added: “I am immensely proud to have led BT over the past 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.”

The firm posted a lower-than-expected 1 per cent fall in first-quarter revenues to £4.4 billion, while operating profits dipped by 1 per cent to £1.4bn, also beating City forecasts. Underlying pre-tax profits rose by 5 per cent to £595m.

Turnover had fallen by 5 per cent during the opening quarter last year and BT is now on track to return to revenue growth in the next couple of years, following four straight years of shrinking sales.

Jonathan Jackson, head of equities at Killik & Co, noted: The free cash outflow of £60m was also better than expected in a quarter that usually experiences a seasonal loss.”

BT said that the number of line-rental customers it lost during the first quarter was at its lowest level in five years.

The group added 197,000 optical-fibre broadband customers between April and June, taking its total to around 1.5 million, and it hopes this growth rate will stay strong as users opt to take faster broadband to watch the new sports TV service.

It also said it had seen signs of higher demand from small and medium-sized companies and a 50 per cent jump in total order intake at its “global services” division, which handles the IT needs of multi-national organisations.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: “The nadir of the March 2009 share price at 72p is now a distant memory and the recovery in BT’s fortunes continues apace.

“As the company has reinvented itself, it has become a more modern, streamlined and focused entity whose prospects remain tantalising.”

BT closed down 7.6p at 334.4p, while BSkyB climbed 12p to 850p.