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30 BT Group plc Annual Report & Form 20-F
INTRODUCTION TO THE FINANCIAL REVIEW
The financial results for the 2007, 2006 and 2005 financial
years reflect the continued strong growth in new wave services
as we drive 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 and
broadband, and our continued cost efficiency programmes. Our
global networked IT services business has grown and our global
capabilities have been strengthened by the successful
acquisitions of INS and Counterpane in the 2007 financial year,
Radianz and Atlanet in the 2006 financial year and Infonet and
Albacom in the 2005 financial year. The acquisitions of PlusNet
and dabs.com in the 2007 financial year have also strengthened
our online sales and service capabilities as well as helping us to
provide our customers with the most that broadband can offer.
In this Financial review the commentary is focused principally
on the trading results of BT Group before specific items, a non
GAAP measure. This is 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 directors believe
that the presentation of the group’s results in this way is
relevant to an understanding of the group’s financial
performance as specific items are significant one-off or unusual
in nature and have little predictive value.
Specific items are therefore analysed and discussed separately
from the line of business results in this Financial review.
The commentary in this Financial review also discusses trading
results including and excluding the impact of acquisitions. In
discussing underlying performance (excluding the impact of
acquisitions) we exclude the results of the Albacom and Infonet
acquisitions made in the 2005 financial year. The acquisitions
made in the 2007 and 2006 financial years do not have a
significant impact on the group results for the year and hence
are not excluded.
The following table shows the summarised income statement
and includes a reconciliation of the key financial performance
measures before and after specific 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.
Report of the DirectorsReport of the Directors
Financial review