BT » Topics » PROFIT BEFORE TAXATION

This excerpt taken from the BT 6-K filed May 31, 2006.
PROFIT BEFORE TAXATION
The group’s profit before taxation for the 2006 financial year was £2,040 million, compared with a profit of £2,354 million in the 2005 financial year.
     The group’s profit before taxation before specific items for the 2006 financial year was £2,177 million, compared with £2,080 million in the 2005 financial year. The improvement in profit was mainly due to cost efficiency savings, lower leaver costs, lower net finance charges and increased profits from joint ventures and associates.

TAXATION
The tax charge for the 2006 financial year was £492 million and comprised a charge of £533 million on the profit before taxation and specific items, offset by tax relief of £41 million on certain specific items. The tax charge for the 2005 financial year was £525 million and comprised a £541 million charge on the profit before tax and specific items, offset by tax relief of £16 million on certain specific items. The tax charge on the profit before taxation and specific items is at an effective rate of 24.5%. This reduction in the effective rate from 26.0% in the 2005 financial year reflects the continued improvements in the tax efficiency of the group.

EARNINGS PER SHARE
The basic earnings per share of 18.4 pence per share for the 2006 financial year compare with 21.5 pence for the 2005 financial year. The following table illustrates the impact of specific items on the basic earnings per share.
 

      2006
pence
    2005
pence
 

 
Basic earnings per share before specific items
    19.5     18.1  
Specific items
    (1.1 )   3.4  

 
Total basic earnings per share
    18.4     21.5  

 

Basic earnings per share before specific items of 19.5 pence for the 2006 financial year compare with an equivalent of 18.1 pence for the 2005 financial year.
     Diluted earnings per share were not materially different in either year.

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