Cable & Wireless Sees New Strategy Deliver Profit Above Expectations

Cable & Wireless’ new strategy of concentrating efforts on becoming the “leading global provider of internet protocol solutions to business customers” appears to be showing its worth, as interim results for the six months to 30 September have shown pre-tax profit jump by 33% to £4.6bn.

£4.2bn of this consisted of the net cash generated by the sale of the company’s Hong Kong operation (see Sharewatch) and its cable business to NTL (see Government Clears NTL/CWC Merger). Although these disposals caused a decrease in group revenue of 2%, revenue from continuing operations grew by 15% to £3.4bn, and even discounting the cash injection they provided, profits exceeded analysts’ expectations by reaching £537m.

Graham Wallace, chief executive of Cable & Wireless, pointed out that strategic relationships have now been formed with companies including Compaq, Microsoft, Nokia and Nortel to improve the range of services offered to current and new business customers. “Our target market is expected to grow revenue overall by 15-20% annually over the next few years.” he said, “We are developing solutions and sales channels to capture this growth and we are transforming our infrastructure and operations to improve profitability.”

At 11am today, shares in Cable & Wireless were worth £8.84, up 34p or 4% on yesterday’s closing price.

Cable & Wireless: 020 7674 5440

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