BT's profits tumble
Profits at BT have taken a hit after the telecoms giant took a Â£225 million charge linked to its Italian accounting scandal.
The group said it will shell out the cash to Deutsche Telekom and Orange in a bid to avoid legal action after its share price collapsed in the wake of the scandal, which saw BT book a £530 million write down earlier this year.
The payout relates to the sale of EE by the duo to BT for £12.5 billion, which left Deutsche Telekom and Orange with stakes in the British firm.
The share price fall following the Italian scandal knocked £8 billion from BT’s market value and meant it was open to legal action from shareholders.
The charge saw pre-tax profit nose dive 42% to £418 million in the first quarter, while revenue fell 1% to £5.8 billion.
Separately, BT announced that it has appointed Marc Allera as chief executive of the combined BT consumer business and Cathryn Ross director of regulatory affairs.
Boss Gavin Patterson said: “BT has delivered an encouraging performance in the first quarter of the year.
“We will continue to simplify and streamline the business and rationalise our costs as demonstrated by our ongoing performance transformation programme.”