LONDON -(Dow Jones)- International telecommunications operator Cable & Wireless, Thursday more than doubled its fiscal year pre-tax profit and said progress turning around its previously ailing U.K. unit was ahead of schedule.
Still, net profit for the financial year ended March 31 dropped 53% to GBP82 million from GBP175 million, as a result of asset disposals and interest and tax increases.
Chairman Richard Lapthorne gave an upbeat forecast on Cable & Wireless's underperforming U.K. business - which was Thursday rebranded Europe, Asia & United States - saying that the turnaround is ahead of schedule. He also said that earnings before interest, tax, depreciation and amortization for the group would be in the range of GBP210 million and GBP220 million for 2007/08, and cut the cash needed to enact the turnaround to GBP280 million from GBP340 million, excluding its wholesale business.
"It's been a good year. The success of the structural changes we made a year ago is there for all to see," said Lapthorne, adding that he was recommending a 30% increase in dividend to 5.85 pence.
Revenues grew 3.7% to GBP3.35 billion from GBP3.23 billion the year before.
Group Ebitda increased 26% to GBP492 million from GBP390 million; while pretax profit more than doubled to GBP249 million from GBP112 million.
The results topped analyst forecasts, which had foreseen a 71% rise in pretax profit to GBP192 million and EBITDA up 17% to GBP456 million. But results underperformed on revenues, which analysts had expected to increase 5.6% to GBP3.41 billion.
While the international business of Cable & Wireless has improved its profits over the past few years, its other unit, the U.K. business, has until now struggled to compete and has made abortive forays into business services and consumer broadband. The U.K. business posted an operating loss of GBP225 million in the year ended March 31, 2006.
U.K. Chief Executive John Pluthero has started to turn around Cable & Wireless's domestic fortunes by scything-off unprofitable business customers, reducing staff and selling its Bulldog internet customer base to U.K. service provider Pipex.
Cable & Wireless International operates in 33 countries - many of them former British colonies - and is the leader in 27 of those markets, providing fixed-line and mobile telephony to consumer and business customers.
Shares in Cable & Wireless have increased 8% over the past few months due to growing confidence that the company is turning around its fortunes. After seeing billions wiped off its market capitalization following the dotcom crash, C&W reentered the FTSE-100 on Nov. 27. Shares closed Wednesday at 186.7 pence giving the company a market capitalization of GBP4.451 billion.
Company Web site: http://www.cw.com
-By Daniel Thomas, Dow Jones Newswires; 44-20-7842-9264; dan.thomas@dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 24th May 2007
Posted to: www.cellular-news.com/story/23951.php