BT will take a one-off financial charge of £340 million to write down the value of its BT Global Services (BTGS) unit. The company said the rest of its business units are performing ahead of financial expectations with EBITDA for rest of group expected to be up 5% over the same period last year.
“The first job of the new management team in Global Services and the new group finance director has been to review the financial position of Global Services and its major contracts. These ongoing reviews reflect changed circumstances and a more cautious view of the delivery of cost efficiencies and contract performance, particularly in the light of the current economic climate. We have also initiated a review of Global Services’ operations which will help us drive our cost savings initiatives and further enhance our ability to serve customers. BT remains committed to the success of Global Services and I believe these changes will create a stronger business that can deliver positive cash flow and excellent customer service,” stated Ian Livingston, Chief Executive of BT.
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- In October 2008, BT cut its financial outlook citing trouble with its Global Services unit. The company announced that François Barrault had resigned as Chief Executive, BT Global Services and as a BT Group plc Board director on October 30th. He has been replaced by Hanif Lalani, currently Group Finance Director.