UK telecoms giant BT has unveiled sharply lower profits, but said its financial position is stronger following a restructuring programme last year.

The company said profits before tax and one-off costs for the year to late March fell by more than a quarter to �1.27bn, while total sales edged up 8% to �18.4bn.

The telecoms giant added that it had slashed its net debts from nearly �30bn a year ago to just �13.7bn.

"It has not been an easy year, but we have taken the hard decisions early and are now in a position of relative strength," said BT Chairman Sir Christopher Bland.

Retrenchment

BT ran up huge debts during a late 1990s acquisition spree, and borrowed further hefty sums to fund the purchase of new generation mobile telecommunications licenses.

Last year, amid mounting investor concern over the comany's financial health, BT cut jobs and sold off some of its overseas acquisitions, putting its global ambitions on hold.

The former British telephone monopoly also demerged its mmO2 mobile phone unit in the UK, and sold off its stake in the online directory group Yell.

In April, BT launched a new three-year growth plan emphasising cost controls and boosting customer satisfaction.

The new strategy also set ambitious growth targets for high-speed broadband internet subscriptions.

Investor approval

The company's 2002 profits were at the top end of expectations, with most analysts forecasting earnings of between �900m and �1.2bn.

BT's debt reduction programme also exceeded its own targets. The company had said it aimed to cut debts to between �15bn and �20bn by the end of the year.

The company added that it was absorbing a �2.2bn one-off charge to reflect a decline in the value of assets held by its business services arm BT Ignite.

City investors welcomed the news, marking BT shares 12.25p higher to 268p in early trade on Thursday.

BT's share price is down from a peak of about 1,050p in January 2000.