Room to breathe, deeply
Cable and Wireless Group’s full year financial report for 2007-08 (pdf here) showed gross earnings (EBITDA) up 23 percent to £605 million, thanks mainly to an outstanding turnaround by the Europe, Asia and US (EAU) division, where revenues grew 161 percent to £219 million.
The EAU (mainly UK) results reveal a positive cash flow for the first time in 16 years, with the UK defined benefit pension scheme fully funded and revenues for 2008-09 predicted to be in the £285-95 million range.
C&W has “some real wind in our sails,” said Group MD John Pluthero. “The business is really starting to show and realise some real ambition for the first time in a long time.” The group “had a dialogue” with troubled telecoms carrier Vanco, said Pluthero, but would not be drawn on the details.
Other possibilities for 2008-09 are a demerger of the EAU and International divisions, further rationalisation of the portfolio, or leveraging and returning capital to shareholders. The dividend payable on 8 August is 5p, making 7.5p for the year, a rise of 28 percent.
During the year, Pluthero bought 537,932 C&W shares, bringing his total to 1.6 million. Chairman Richard Lapthorne and Finance Director Tony Rice both bought about 500,000, to bring their shareholdings up to 3.5 million each.
In addition, the pool for C&W’s four-year incentive plan for about 50 executives was doubled to £54 million. Present management has added about £1.2 billion to the market value of C&W since the scheme was launched in April 2006. The first payment under the scheme will be next year.
