BT 2003 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2003 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 162

  • 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
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162

The year
This has been a really good year for BT. We said
12 months ago that, in a turbulent market, your
company had taken the hard decisions and necessary
actions early. Events have shown that we were right to
do so and that we have now established a strong base
for sustainable growth. Earnings per share in the year
increased by 61% and net debt reduced by over
£4 billion. The group generated free cash flow of
£1.7 billion. The full year dividend of 6.5 pence per
share reflects the group’s financial performance,
operational strength and confidence in the future.
In the past two years, our net debt has been
reduced from £27.9 billion as at 31 March 2001 to
£9.6 billion as at 31 March 2003, a reduction of 66%.
The foundations of the progress in 2003 were the
achievement of operating efficiencies and the sale of
non-core assets, such as our stake in Cegetel, which
we sold for £2.6 billion. Progress was sustained by
improving service in our traditional markets, and our
growing success in such new-wave markets as
broadband, mobility, information and communications
technology (ICT) and solutions. We continue to invest
in and to transform our network to help take our
20 million customers into a future shaped by new
communications possibilities.
Purpose and responsibilities
As a business, our purpose is to connect the worlds
of our customers. In achieving that purpose we will
provide the greatest customer satisfaction and enjoy
commercial success if we make every experience of
our services simple and complete.
Your company’s broader responsibilities include
the maintenance of a good reputation, definitive
standards of governance and a coherent corporate
social responsibility programme, all vital to
encouraging investors to put their trust in us,
customers to buy from us and the best people to
work for us. This sense of responsibility runs through
the whole of our organisation.
Pensions
BT takes its responsibilities to its pensioners, existing
and prospective, very seriously. The result of a recent
valuation of the main BT pension scheme, carried out
by the independent actuary appointed by the Scheme
trustees, showed a funding deficit of £2.1 billion. This
compares to £1 billion at the last formal valuation in
1999. BT has agreed it will make good this deficit with
additional annual payments of £232 million, compared
to the £200 million additional annual payments that BT
has been making.
Strength of the BT Pension Scheme
The BT Pension Scheme, which has been closed to new
members since 31 March 2001, is backed by BT. The
Scheme assets are controlled by trustees who must act
in the best interests of its members. Any deficit has to
be made good by the company, and no changes can be
made to the rules and benefits that apply to Scheme
members without the agreement of the trustees.
Chairman’s message
4BT Annual Report and Form 20-F 2003
Sir Christopher Bland, Chairman, reports on a year in which BT further
reduced debt, grew its dividend significantly and continued to invest in
the future.