BT warns disorderly Brexit could hit business and consumer confidence

BT warned that a disorderly Brexit could hit business and consumer confidence but said it is too early to predict the extent of the impact, as it posted a double-digit increase in profits.

The telecoms giant said it has prepared for a possible no-deal Brexit and that its contingency planning has been focused on ensuring it can “provide uninterrupted service to our customers, including sufficient inventory to protect against potential import delays”.

“We are also making the necessary changes to our contracts and processes so that we will continue to be able to transfer customer data to and from the EU.

“A disorderly exit could have a damaging impact on consumer and business confidence. It is too early to estimate the size of any potential impact”.

Meanwhile, in the nine months to December 31 revenue slipped 1% to £17.56 billion, which BT blamed on around £180 million worth of regulated price reductions on its Fibre-to-the-Cabinet (FTTC) and Ethernet products for its Openreach business as well as a poor performance in its enterprise unit.

However, pre-tax profit surged 20% to £2.09 billion thanks to lower costs including the settlement of EE acquisition warranty claims and provisions related to its Italian business.

Outgoing chief executive Gavin Patterson said he was handing over a firm with “good momentum” and backed the company’s full-year expectations.

“We have continued to deliver consistently against our strategic objectives in a tough market, resulting in another sound quarter of operational and financial performance.

“Our overall outlook for the full year remains unchanged, with EBITDA (earnings before interest, taxation, depreciation and amortisation) around the top end of our guidance for full-year 2018/19”.

He said the group continues to expect “regulation, market dynamics, cost inflation and legacy product declines” to have an effect in the short term, but will be “more than offset by improved trading and cost transformation by our 2020/21 financial year”.

“I am handing over the business with good momentum behind its ongoing transformation programme and wish my colleagues all the best for the future.”

Mr Patterson is to be replaced by former Worldpay boss Philip Jansen.