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BT REPORTS FIRST QUARTER RESULTS 1992/93

 BT REPORTS FIRST QUARTER RESULTS 1992/93
 NEW YORK, July 29 /PRNewswire/ -- British Telecommunications plc


(NYSE: BTY, BTY.PP), formerly British Telecom now trading as BT, announced today first quarter financial results for the period to June 30, 1992.
 A synopsis is:
 -- Exceptional charge of 135 million pounds sterling ($257 million) against the first quarter profits relating to the loss made on divestments of Mitel, International Aeradio and Sharelink as a major part of refocusing on the core business of telecommunications networks and services.
 -- Earnings per ADR after the exceptional charge decreased by 37.5 percent to .56 pounds ($1.06) and before the exceptional charge decreased by 13 percent to .78 pounds ($1.48), relative to the first quarter last year.
 -- Income before tax and after the exceptional charge decreased by 27.8 percent to 596 million pounds ($1,132 million) and before the exceptional charge decreased by 11.4 percent to 731 million pounds ($1,389 million), relative to the same period last year.
 -- Revenues from continuing business activities fell by 1.3 percent. Overall revenues fell by 2.1 percent to 3,273 million pounds ($6,219 million), emphasizing the continued pressures of the U.K. economy, regulation and competition.
 -- Call Volume growth of 5 percent for international calls and a decline of 1 percent for domestic calls on a 12-month moving average.
 -- Access line connections over the 12 months to June 30, 1992, increased by 1.1 percent overall, with both business and residential lines each 1.1 percent higher.
 -- Operating costs, excluding redundancy payments, were static at 2,418 million pounds ($4,594 million), a real reduction relative to the U.K. inflation rate of 3.9 percent.
 -- Manpower for the quarter was reduced by 9,900, including 5,200 people in businesses divested. Redundancy costs charged against the first quarter profits totalled 56 million pounds ($106 million).
 Iain Vallance, chairman of BT, said:
 "Revenues for the first quarter were lower than in the same quarter last year, reflecting the continued pressures of the economy, regulation and competition. Inland call volume was below last year. Cost controls kept operating costs static and the interest charge fell. There was an increase in redundancy charges resulting from the initial phase of the large number of job reductions which will occur this year. After an exceptional charge relating to the disposal of non-core businesses, earnings per share decreased by 37.5 percent to 5.6 pence; excluding the exceptional charge the decrease was 13 percent. The external environment in which BT is operating means prospects are still uncertain."
 During the first quarter BT divested its interests in Mitel Corporation, International Aeradio and Sharelink as a major part of the policy of refocusing on the core business of providing telecommunication networks and services. The 135 million pounds ($257 million) loss made on these divestments, which almost entirely comprises goodwill written off to retained earnings in prior years when the interests were acquired, has been recorded as an exceptional charge within the income statement. BT is required to account for the goodwill in this way under new U.K. accounting rules introduced in 1991.
 The annual revenues of these businesses totaled 255 million pounds ($485 million) in the year ended March 31, 1992, some 2 percent of group revenues, and they had a negligible effect on group operating profit in that year.
 The 1992 voluntary release scheme has been more successful than anticipated. Initial estimates were for some 20,000 people to leave at a cost of around 400 million pounds ($760 million) -- excluding the incremental liability for pension benefits for early retirement, estimated at around 550 million pounds ($1,045 million). In the event, some 29,000 people will leave the group under the scheme in the current financial year. The costs and benefits to the group will increase correspondingly.
 Domestic call revenues declined by 3.7 percent to 1,269 million pounds ($2,411 million) due to a decline, of 1 percent on a 12-month moving average, in the domestic call volume during the first quarter which reflected the continuing recession and competition. Increased revenues from international call volume growth of 5 percent, on a 12-month moving average, was more than offset by the effects of the overall price reductions of 9.6 percent on outgoing calls made in September 1991.
 Other sales and services revenues grew by 2.5 percent to 739 million pounds ($1,404 million) and included significantly increased interconnect income from BT's major U.K. competitor, higher private circuit revenues and strong growth in mobile communications revenue as a result of a good performance by Cellnet in the quarter.
 Capital expenditure was 492 million pounds ($935 million) compared with 588 million pounds in the first quarter of last year partly due to completion of a major modernization of the network in London combined with a reduction in the rate of network expansion during the recession.
 British Telecommunications plc is the principal supplier of telecommunications services and products in the United Kingdom.
 NOTE: Results reported in pounds sterling have been expressed in U.S. dollars at an exchange rate of $1.90 to the pound, the rate prevailing on June 30, 1992, the last date of the reporting period.
 Each ADR represents ten shares of BT ordinary stock.
 -0- 7/29/92
 /NOTE TO EDITORS: This release summarizes the statement made in London today/
 /CONTACT: Roy Bliss of BT, 212-297-2711 or 800-331-4568/
 (BTY) CO: British Telecommunications plc ST: New York IN: TLS SU: ERN


GK-TS -- NY009 -- 4418 07/29/92 08:19 EDT
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Date:Jul 29, 1992
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