BT boss Ben Verwaayen has announced the telecoms firm was in a stronger financial position after a year of upheaval at the group.

The Dutchman, who joined BT in February, said the underlying performance of the business was improving as it looked to the future.

Underlying pre-tax profits in the final quarter of the group's financial year to March 31 were up 43 per cent, while turnover had grown by five per cent.

Net debt had also been brought down to £13.7bn, half the level seen a year ago as BT counted the cost of an acquisition spree.

However, pre-tax profits for the year to March 31, fell to £1.27bn, a fall of 27 per cent, but still ahead of expectations. Turnover edged ahead to £21.8bn from £21.1bn in the previous year.

Mr Verwaayen said his focus was on improving customer satisfaction, cutting costs and introducing new services.

He said: "In this way we will deliver real value to our shareholders and our customers."

BT has been transformed in the past year, selling a host of stakes in foreign firms and demerging its BT Cellnet mobile phone business, since renamed O2.

The group has also sold its Yellow Pages division Yell, closed its Concert joint venture with AT&T, and launched a rights issue of £5.9bn.

Underlying earnings at BT's core residential phone business, BT Retail, rose to £1.3bn from £1.1bn.