Difficult economic conditions may have prompted management at Cable & Wireless to postpone the group's planned split into two new listed companies, but the group's strong first half performance has appeased weary investors as management raised both dividends and full-year guidance.
Group earnings before interest, tax, depreciation and amortisation (EBITDA) grew 26 per cent to £357m, fuelled by strength in both its divisions. EBITDA swelled 43 per cent in Europe, Asia and the US, driven by data and hosting demand, and 13 per cent in its international business, one of the best first halves in its recent history, according to executive chairman John Pluthero.
Management has now raised its full-year EBITDA outlook to £780m - from between £702m to £725m previously. The group is also expecting savings of £82m from the acquisition of Thus, although integration costs of £39m will be incurred in 2008-09.
Meanwhile, the decision to demerge the group has been delayed until economic conditions improve, with management currently favouring the strength of the combined group's balance sheet and defensive qualities over potential realisation of value for shareholders.
Broker Investec expects full-year pre-tax profits of £330.4m, giving EPS of 8.4p (from £299m and 7.4p in 2007).
CABLE & WIRELESS (CW.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 144p | MARKET VALUE: | £ 3,615.1m | |
| TOUCH: | 143-144p | 12-MONTH HIGH: | 196p | LOW: 108p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 69p* | NET CASH: | £54m | |
| Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 1.56 | 166 | 4.30 | 2.50 |
| 2008 | 1.64 | 129 | 3.40 | 2.83 |
| % change | +5 | -22 | -21 | +13 |
Ex-div:19 Nov Payment:23 Jan *Includes intangible assets of £811m or 32p per share | ||||
Guide to the terms used in IC results tables.
More analysis of company results
More articles, comment and data on Cable & Wireless
