|BT has reported that despite a fall in sales they have seen a sharp rise in annual profits.|
While sales dropped by 4%, annual pre-tax profits rose by 42% to £2.4bn.
Profits have been boosted by deep cost cuts and one-off gains of £166m, which included a large tax credit and interest from the pension fund.
BT's chief executive, Ian Livingston, said the environment remained "challenging", but highlighted the growth of BT's broadband business.
"We have now passed 10 million homes and businesses with our fibre roll-out. This is many months ahead of schedule and brings the benefits of super-fast broadband to families and businesses in cities, towns and rural areas across the UK," said Mr Livingston.
The growth of the broadband business has been compensating for the fall-off in BT's traditional telephone business, which has been in decline for years.
BT has also been on a cost-cutting drive, which saw costs fall by 4% last year.
Those savings have helped BT boost its annual payout to shareholders. It plans to raise the dividend by 12% this year.
In March, BT said that it would bay £2bn into its pension fund, one of the biggest one-off pension payments made by a company.