BT 2001 Annual Report Download - page 4

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Chairman’s message
04 BT Annual report and Form 20-F
We have seen the continuing rapid
spread of communications technologies
into every part of everyday life. But it
has also been a year of great turbulence
for the industry itself. At a time of such
profound change, many players,
including BT, have not found it easy to
stay ahead of the game.
However, BT’s operating
performance during the year has been
satisfactory, and in line with
expectations. Group turnover rose by
9%, and earnings before interest,
taxation, depreciation and amortisation
have been maintained at similar levels to
last year.
Netdebthasrisentoan
unsustainable »27.9 billion at 31 March
following the acquisitions made during
the year. Our ¢rst priority is to repay a
signi¢cant amount of this debt. We have
made a good start with the agreed sales
of investments in Japan, Spain,
Switzerland and Malaysia, which should
raise around »5.5 billion. Further
disposals are planned.
A major part of our plans for the
future is our intention to demerge BT
Wireless. This will mean that, provided
the necessary permissions are received,
shareholders will own shares in two
strong and separately quoted businesses,
both in the FTSE 100 list: BT Wireless
and Future BT, which will be a focused
European network and retail group
concentrating on voice and data services.
This amounts to nothing less than a
structural and ¢nancial transformation of
BT. I joined BT as Chairman on the
basis that I was totally committed to this
transformation and would be responsible
for leading the Board in overseeing its
delivery.
To provide greater ¢nancial
stability and to help ¢nance this
restructuring, we have announced a
»5.9 billion rights issue. Clearly it would
not be appropriate to raise this amount
of money from shareholders and then
immediately recycle some of it back
through dividends. We are, therefore,
taking the unwelcome but necessary step
of halting payments for the 2000/2001
¢nal dividend and also the current year’s
interim dividend. Future dividend policy
will be decided by the individual listed
companies, taking into account their
respective capital structures, their cash
requirements and the markets in which
they operate.
The past year has been one that no-one with any
involvement in the communications industry will ever
forget.