Dividend axed at Cable & Wireless Worldwide

Cable & Wireless Worldwide - which provides a range of voice and data services - is clearing the decks, both on the balance sheet and on the board, with chief executive John Pluthero stepping down to be replaced by Gavin Darby, formerly of Vodafone and Coca-Cola.

The surprise move came with a broad financial tidying-up exercise, which resulted in £624m of exceptional items in the first half - comprising goodwill impairments of £436m, a reduction in deferred tax assets of £146m and a £42m obsolete assets write-off. The half-year dividend was also halved - there will be no further dividends until cash flow comfortably covers any proposed future payments. There will also be a second-half £100m payment into the pension scheme, freeing up previously ringfenced funds of £125m.

Trading in the first half held up fairly well given the tough backdrop, although cash profits were still down 6 per cent in the period to £190m. However, the group has managed to retain existing customers while winning new ones. But management conceded that underlying growth was constrained by a lack of capacity and work is now in place to expand the data centre by early next year.

Investec Securities expects full-year adjusted pre-tax profit of £72.9m, giving EPS of 4.8p (£143m and 7.4p in 2011).

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