C&W revives demerger plan despite Caribbean woes

Published on Thursday 5 November 2009 20:34

TELECOMS giant Cable & Wireless yesterday revived demerger proposals that will see the group split its UK and regional businesses.

The firm put the break-up plans on ice last November at the height of the financial crisis due to the stock market turmoil and credit squeeze.

Chairman Richard Lapthorne used the company's half-year results to confirm plans to list the two operations as independent, publicly-quoted companies.

C&W's worldwide business provides telecoms services to blue-chip customers in the UK and overseas, while the regional telecoms arm operates as four business units in the Caribbean, Panama, Macau and Monaco.

The company posted a 30 per cent rise in half-year earnings to 463 million, but the improvement was overshadowed by a revision to full-year guidance in the regional business due to weaker Caribbean trading.

Revenues grew by 138m to 1.14 billion due to the acquisition of Scottish rival Thus, which offset a reduction in low margin voice calls and discretionary spending by some customers in the recession. It is likely that a demerger could trigger payouts to senior executives under the group's long-term incentive plan. The bonus programme is already paying out 32m to managers this year.