BRITISH TELECOM LOOKS FORWARD TO MORE PROGRESS
British Telecommunications Plc <BTY.L>
said it looked to further progress this year after reporting a
11.7 pct rise in 1986/87 pretax profits to 2.07 billion stg.
    The result was at the top end of market expectations but
the shares nonetheless declined from last night's closing
levels to stand 12p lower at 303p at 1130 GMT.
    Telephone call income rose 9.5 pct to 4.97 billion while
rental income increased 10.6 pct to 3.06 billion.
    The company said it had not paid anything through its
profit-sharing scheme, after 18 mln stg last year, considering
such payments inappropriate after a series of strikes.

    It said total operating costs rose 806 mln stg to 7.08
billion while its basket of across-the-range tariffs had been
reduced overall by 0.3 pct last November under arrangements set
up before privatisation.
    Despite the rise in profits, taxation rose only 11 mln stg
to 754 mln, reflecting the cut in U.K. Corporation tax to 35
pct from 40 pct during the year. Gearing fell to 33 pct from 39
pct. Price regulation formulae were introduced for both the
previously state-owned utilities that have been floated off.
Yesterday, British Gas Plc <BRGS.L> said it was cutting tariffs
for domestic customers by about 4.5 pct.
    BT chairman Sir George Jefferson said work on new digital
exchanges and optical fibre links will continue and the fight
against vandalism of public call boxes would go on.
    "We have been spending 160 mln stg over three years
modernising and expanding our payphone service to make our call
boxes more reliable and harder to vandalise."
    Expenditure on digital exchanges was about 500 mln stg and
progress had been made in installing optical fibre.

 REUTER
