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Telecoms group BT has reported a sharp rise in profits, thanks largely to a jump in the number of broadband users.

Pre-tax profits for the three months to the end of September were £552m, 36% higher than a year earlier. Revenue fell slightly to £4.9bn.

The group added 166,000 new retail broadband customers during the period, taking the total to six million.

BT also confirmed that it expected to hit its full-year profit targets.

"We have increased cash flow, profits and underlying revenue," said group chief executive Ian Livingston.

"We achieved a market leading 63% share of broadband net additions and another quarter of growth in fixed lines."

The results were better than investors had expected, with BT shares up 2.7% at Thursday's close.

"The reiteration of full year guidance has been well received, underpinned by particular strength in broadband and at its once beleaguered Global Services division," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.