Britain's BT Group will miss earnings forecasts for its second quarter due to a poor performance of its Global Services unit and the boss of that division has now resigned, the company said today.
"For the second quarter we expect to report that group revenue will be ahead of expectations but that EBITDA and earnings per share will be slightly below expectations," it said.
It expects its BT Retail, BT Wholesale, Openreach and other activities to deliver results in line with or ahead of expectations but said the performance of the Global Services division had been poor.
Global services provides outsourced IT, telephone and network services to large companies.
BT said the division was now expected to produce an earnings margin in the range of 7 to 8 per cent for the current financial year, which will knock group EBITDA into a small decline compared to last year.
Global Services had a medium-term EBITDA margin of 15 per cent.
"We expect revenue growth in this division will remain strong, up 15 per cent year on year, but EBITDA of around £120 million will be significantly below expectations," the group said.
The fall in EBITDA was due to slower than anticipated delivery of efficiency savings and the continued decline in higher margin UK business.
The Global Services boss Francois Barrault will be replaced by group Finance Director Hanif Lalani.
Reuters