Cable & Wireless considers demerger

UK-based carrier Cable & Wireless said Thursday it is considering splitting the company into two parts, as it reported a decline in annual profit.

C&W said that profit for the year to end March 31 fell to £220m from £234m in the pervious year. Revenues declined from £3.34bn to £3.15bn over the same period.

At a press conference on the financial results, the company revealed that it was considering a “demerger, rationalisation of the portfolio or leveraging and returning capital to shareholders” as its options and intends to put a strategy into action in a 2008 – 2009 timeframe.

Speaking at the conference Richard Lapthorne, chairman of C&W said: “We introduced two standalone business units to Cable & Wireless in 2006. The new structure has brought increased focus to both businesses and we’re pleased to report in 2007/08 we have passed several important milestones. In the Europe, Asia & US business we have returned to revenue growth with over 40% of revenue now accounted for by IP, data and hosting products.

“In the International business, we have refocused the business on its drivers of value. We have set our strategy and approach and as a result are targeting growth in EBITDA for 2008/09 of 8% to 10% with a margin of 35%. We expect Macau and Panama to continue to deliver with further improvements in Jamaica.”