Ben Verwaayen today signed off as chief executive of BT Group after six years in charge on a high with much better than expected trading in the final three months of its financial year.

He also predicted that under new chief executive Ian Livingston the group would improve revenues and earnings in the current financial year.

Revenues rose by 2% in the quarter to end-March, when most analysts had expected them to be flat, and pre-tax profits were up 3% at £714 million. Verwaayen said the growth had come particularly from business customers: "Large and small they now all see the convergence of IT and communications and realise we can satisfy both."

But he said consumers were becoming more demanding, wanting more technology. Recent launches like BT Broadband Anywhere had seen strong sales.

Verwaayen had good news for the City with a promise of more cost savings at around £700 million and lower capital expenditure of around £3.1 billion in the current financial year. Both numbers were better than analysts expected and reflect a revised strategy for the group's so-called 21st Century Network which is aimed at bringing much faster internet speeds to all customers by 2011.

Verwaayen said: "We will make it customer-driven rather than technology-driven which will be much more efficient."

For the year to end-March, BT's profits were flat at £2.5 billion on revenues 2% higher at £20.7 billion. The dividend for the year rises by 5% to 15.8p a share.

Chairman Mike Rake paid tribute to Verwaayen, saying he had "transformed" BT from a fixed line business into a software driven global communications company.