Marsh ousted after third C&W warning

Cable & Wireless Worldwide - the company that provides high-speed telephone services to the government, the police and companies such as Tesco - has replaced its chief executive after a third profits warning in a year.

Chairman John Pluthero has taken over from Jim Marsh after sales slowed in the first ten weeks of its financial year and prompted the company to halve its planned 2012 dividend.

Shares dropped 15 per cent to their lowest level since the group demerged from the Caribbean operations of Cable & Wireless last year.

Pluthero, who was one of the architects of the demerger, was previously the group's chief executive but moved up to become chairman in March last year following the split.

Prior to the demerger, both Marsh and Pluthero received huge cash bonuses under a controversial incentive plan based on the company's share price performance.

C&W Worldwide, which is predominately UK-focused, has been hit by the squeeze on government spending and the weak economy.

It issued profit warnings in July last year and in March, while finance director Tim Weller resigned three months ago.

The group yesterday said the slowdown in sales would mean underlying profits will come in 5-10 per cent below market expectations for underlying profits of about 440 million.

Morten Singleton, an analyst at broker Investec, said the market was not expecting a profit warning this early in the financial year, but added it may now lead to a more radical approach to the running of the business.

Pluthero said: "I'll be looking to take a more radical approach to building on our hosting, cloud and data services business, whilst becoming more competitive and efficient in the mature product areas.

"It has been easy to lose sight of what this business could be; it is my intention to reassert and realise that future."

Independent director John Barton has been appointed as chairman.