BT has reported a 2 per cent fall in adjusted revenues, as it reconfirms its decision to appeal the ruling against changing the index used for pension increases to CPI.
Its results for the third quarter of 2017, saw adjusted revenues to £5,979m, with adjusted profit before tax at £818m, a fall of 1 per cent. In the results, BT reconfirmed it is appealing the court decision against changing the index used for pension increases from RPI to CPI for section c members.
Last month, the High Court ruled that BT cannot swap the index used to increase pensions for section c members of the BT Pension scheme. BT had argued that RPI had become inappropriate but the judge ruled that the matters and events put forward by BT, had not caused the use of RPI to become inappropriate.
Speaking about the company’s pensions, BT chief executive Gavin Patterson said: “The triennial valuation of the BT Pension Scheme is proceeding and constructive discussions continue with the BTPS Trustee. We still expect to complete the valuation in the first half of the 2018 calendar year. Our aim remains to deliver fair, flexible and affordable pensions to all of our employees.”
Commenting on the results, Hargreaves Lansdown senior analyst Laith Khalaf said it is not a “pretty picture” for BT at the moment. “In the immediate future BT’s prospects will be heavily influenced by three things – pensions, broadband pricing, and football.
“The company is currently in negotiations with trustees over how much it has to pay into the pension scheme, and low interest rates will help to inflate BT’s obligations. However rising costs may be mitigated by scaling back benefits for members, or by pledging certain assets to the pension scheme in exchange for smaller contributions,” he said.