C&W’s Focus On IP Networks Pays Off

Towards the end of 1999, C&W sold its UK consumer cable division – Cable & Wireless Communications (CWC) – to rival cable company NTL. Since then C&W has begun to focus its strategy on IP networks, revenues from which grew by 41% to £881 million, for the year ended 31 March 2001.

Global revenues were up 15% at £3.96 billion, whilst overall profit before tax dropped by 16% to £3.39 billion.

C&W says it has now almost completed the major restructuring of its business; this will culminate in the sale of Cable & Wireless Optus later in the year. It has divided the remaining business into Cable & Wireless Global and Cable & Wireless Regional. Regional revenues rose by 10% across the year.

As expected, the economic downturn in the US negatively impacted the figures. Commenting on the results, chairman Graham Wallace said:

“As described in our trading update, our results in the second half of the year were inevitably affected by the rapidly changing market conditions in some sectors, especially in the US. Major changes in the industry driven by customer needs, rapidly evolving technology and consolidation will continue.

“Our response is to take action to improve our operational effectiveness – focusing on managing margins, improving cost effectiveness and reducing capital expenditure – and to invest wisely in high growth value added services. We believe this approach will create a business of lasting value.”

At 11:30am today Cable & Wireless stock was down 6p at 446p.