Report Overview


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BT unscheduled trading update: further drastic revisions at Global Services, with more to come


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BT’s latest trading update involved a massive £340 million one-off charge to reflect a more cautious view of contract profitability and realign reported performance with cash flow; in addition reported GS EBITDA for the quarter to December is expected to be negligible.
There will be little visibility of improved performance at GS until the various ongoing reviews of the business are completed, with a further charge related to one or more NHS contracts the most likely outcome.
Performance at the rest of BT group is continuing to be relatively resilient, and price changes at BT Retail and Openreach should help to an extent. But GS looks likely to prove a major drag on group performance well into 2010.