Cable & Wireless turns the corner

2 Jun 2004

UK telco Cable & Wireless has reinstated dividend payments to its shareholders as from its core domestic operations show signs of stabilising for the first time in three years. Although total group sales for the year to 31 March 2004 fell by 8% to GBP3.38 billion, pre-tax profit before exceptional items increased fourfold to GBP317 million. Cable & Wireless’ UK business, currently in the throes of being restructured, contributed GBP1.66 billion to revenues, down slightly from GBP1.68 billion. Total net losses for the year stood at GBP237 million, a dramatic improvement of the previous year’s loss of more than GBP6.5 billion. Cable & Wireless said yesterday that it planned to pay shareholders a full dividend of 3.5 pence per share, comprising an interim dividend of 1.05 pence and a final one of 2.1 pence. Shares in the company rose by almost 5% to GBP1.27 during early trading in London today.

Separately, Cable & Wireless announced this morning that it has agreed to buy a majority 55% stake in Monaco Telecom from Vivendi Universal for EUR162 million. Monaco Telecom is 45% owned by the Principality of Monaco and the transaction is subject to the formal approval of the Monaco government. On completion, Cable & Wireless will sell a 6% stake in Monaco Telecom to Compagnie Monégasque de Banque (CMB) for EUR18 million. CMB will be Cable & Wireless’s financial partner in Monaco Telecom, which has exclusive rights to provide fixed line, mobile, internet access, and cable services in Monaco. Internationally, Monaco Telecom has operated a mobile network in Kosovo since 2000, and at the beginning of 2003 it was awarded the second GSM licence in Afghanistan as the strategic partner in a consortium 51% owned by the Aga Khan Fund for Economic Development. For the year ended 31 December 2003 Monaco Telecom reported a net profit of EUR18 million on consolidated turnover of EUR172 million.

United Kingdom, Cable & Wireless (UK)