BT 2000 Annual Report Download - page 32

Download and view the complete annual report

Please find page 32 of the 2000 BT annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 129

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129

Annual report and Form 20-F 31
BT's Yellow Pages and other directory businesses
include the Yellow Book USA business acquired in
August 1999. Turnover of »642 million has grown by
31% in the 2000 ¢nancial year, of which two thirds is
due to this acquisition. The UK business has grown by
about 9%, partly re£ecting the good growth in the
economy. In the 1999 ¢nancial year, turnover grew by
5.4%, due mainly to an increased volume of advertising
in the UK.
Turnover from BT's
other sales and services has
grown by 11.3% in the 2000
¢nancial year to »2,513
million after growing by 23%
in the 1999 ¢nancial year.
Much of the growth in both
¢nancial years is attributable
to the BT Syncordia Solutions
outsourcing business and
Syntegra, which provides
systems integration services,
both in the UK and worldwide.
Videoconferencing, and
broadcasting and other multimedia services also contributed
strongly to the growth in turnover. This category also
included sales by Concert Communications up to early January
2000 before its transfer to the new Concert joint venture.
BT's share of its ongoing ventures' turnover rose from
»399 million in the 1998 ¢nancial year to »1,270 million in
the 1999 ¢nancial year and to »3,364 million in the 2000
¢nancial year, including sales by the ventures to BT. This
growth was due to our establishment and acquisition of
interests in ventures in North America, Europe and Asia
Paci¢c over the past three years. Acquisitions of interests
in the 2000 ¢nancial year contributed »1,228 million of the
growth. In the 2000 ¢nancial year, »3,164 million of the
total arose from ventures located outside the UK, compared
with »1,149 million in the 1999 ¢nancial year and
»333 million in the 1998 ¢nancial year. The principal
contributors in the 2000 ¢nancial year were Cegetel
(»727 million), Concert (»583 million from January 2000),
Japan Telecom (»501m from September 1999), Viag
Interkom (»296 million), Airtel (»250 million) and a full
year's contribution from LG Telecom (»200 million). In the
1999 ¢nancial year, the main contributors were Cegetel
(»578 million), Airtel (»157 million), Viag Interkom
(»82 million) and LG Telecom (»81 million from
October 1998). In the 1998 ¢nancial year, the main
contributor was Cegetel (»185 million from
September 1997).
Other operating income
As part of the arrangements for the establishment of
Concert, BT has been seconding sta¡ and providing
administrative and other services from its launch in early
January 2000. The income from these services totalled
»79 million in the 2000 ¢nancial year. Concert will be
setting up its own administration during the course of
2000. In the 1998 ¢nancial year, BT received US$465 million
as the break-up fee and partial reimbursement of expenses
incurred under the BT/MCI merger agreement. This
receipt, net of relevant expenses incurred in that ¢nancial
year, was included as an exceptional pro¢t of »238 million
in other operating income for that year.
Operating costs
Total operating costs increased by 15.4% in the 2000
¢nancial year to »15,359 million after increasing by 7.7%
in the 1999 ¢nancial year. As a percentage of group
turnover, operating costs, excluding goodwill amortisation,
decreased from 79.0% in the 1998 ¢nancial year to 78.5%
in the 1999 ¢nancial year but increased to 81.6% in the
2000 ¢nancial year. In the 2000 and 1999 ¢nancial years,
exceptional costs of »111 million and »69 million were
incurred, respectively, which primarily related to Concert
Communications' disengagement from MCI and the
proposed closure of BT Cellnet's analogue cellular phone
network. These exceptional costs are considered separately
in the table below and the discussion which follows.
2000
£m
1999
£m
1998
£m
Staff costs 4,283 3,871 3,917
Own work capitalised (498) (428) (424)
Depreciation 2,704 2,568 2,395
Goodwill amortisation 89 ± ±
Payments to
telecommunication
operators 3,068 2,106 1,600
Other operating costs 5,602 5,119 4,867
Total operating costs
before exceptional costs 15,248 13,236 12,355
Exceptional costs 111 69 ±
Total operating costs 15,359 13,305 12,355
Sta¡ costs increased by 10.6% in the 2000 ¢nancial year to
»4,283 million, after rising by 1.9% in the 1999 ¢nancial
year, if a non-recurring charge in the 1998 ¢nancial year is
excluded. In the 2000 ¢nancial year, the numbers employed
in the group increased by 12,100 to 136,800 at 31 March
2000. This net increase included 5,000 individuals
employed outside the UK mainly through acquisitions,