BT 2005 Annual Report Download - page 27

Download and view the complete annual report

Please find page 27 of the 2005 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 146

  • 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

Introduction
The financial results for the 2005 and 2004 financial years
reflect the continuing strong growth in new wave services
as we derive value from transforming the business. Our
results reflect the continuing transformation of our
business operations and markets in an environment where
the pace of change is accelerating. We are driving the
change by providing our customers with new technology
and services with greater capabilities and lower cost. The
focus on delivering the strategy continued and the
group’s performance benefited from the growth in new
wave activities such as networked IT services, broadband,
mobility and managed services and continued cost
efficiency programmes. Our global networked IT services
business is growing strongly and our global capabilities
have been strengthened by the successful completion of
the acquisitions of Albacom and Infonet in the 2005
financial year. Subsequent to the year end we also
completed the acquisition of Radianz.
The 2003 financial year was characterised by a focus
on implementing and delivering the strategy announced
in April 2002 and further corporate transactions in the
continued restructuring of the group and reduction of net
debt. The corporate transactions included the unwind of
the Concert joint venture on 1 April 2002 and the disposal
of our interest in Cegetel for £2.6 billion.
In this Financial review the commentary is focused
principally on the trading results of BT Group before
goodwill amortisation and exceptional items. Goodwill
amortisation and exceptional items, by virtue of their size
or nature, are excluded because they predominantly relate
to corporate transactions rather than the trading activities
of the group. This is also consistent with the way that
financial performance is measured by management and
we believe allows a meaningful comparison to be made of
the trading results of the group during the period under
review.
The goodwill amortisation and exceptional items are
therefore analysed and discussed separately from the line
of business results in this Financial review because they
are considered to be a reflection of the corporate activity
rather than the trading activity of the lines of business.
The following table shows the summarised profit and
loss account which includes a reconciliation of the key
performance measures before and after goodwill
amortisation and exceptional items and is discussed
further in this Financial review. The operating results by
line of business are discussed in addition to the overall
group results as we believe the activities and markets they
serve are distinct and this analysis provides a greater
degree of insight to investors.
26 BT Group plc Annual Report and Form 20-F 2005 Operating and financial review