C&W turns in strong annual performance, share price falls

Cable & Wireless today reported a strong annual performance. For the year ending on 31 March, Group revenue was up 16% to £3.646 billion. Group EBITDA before exceptionals of £822 million up £217 million (36%), driven by £138 million (23%) of growth, £78 million from Worldwide (formerly Europe, Asia & US) and £60 million from CWI (formerly International).
The figures were also helped by £29 million (5%) of additional EBITDA following Worldwide’s acquisition of Thus and the “associated EBITDA synergies”. In addition, the company benefited from £50 million (8%) from due to sterling’s weakness.
C&W’s shares fell 10% after its results were revealed this morning, despite chairman Richard Lapthorne saying that Group, Worldwide and CWI EBITDA were all ahead of guidance for 2008/09 and Worldwide EBITDA was up 49% on last year to £326 million and CWI EBITDA up 11% to US$921 million.
He added, ““We’re well aware that the recession provides a degree of uncertainty but our current view is that we have a robust set of plans that will allow us to progress further in 2009/10. Consequently, we’re guiding to an increase in EBITDA to over £1 billion and we expect a substantial increase in cash generation.
Shareholders have long been keen to release value from the company by spinning off the UK and international business, but Lapthorne said, “Whilst our trading position is in good health, as announced last autumn we have postponed, but not cancelled, our value realisation plans until we can foresee a sustained period of normality returning to the credit and equity markets.”