C&W to Split, Reports H1

LONDON -- Cable and Wireless plc (“Cable & Wireless”) today announces its intention to separate into its two businesses, Worldwide and CWI. This separation is expected to be effected by a demerger of Worldwide.

Richard Lapthorne, Chairman of Cable & Wireless, commented: “As a result of the emerging signs of more settled conditions in financial markets, we are now moving forward to list the two businesses as independent, publicly-quoted companies. The Board believes that a demerger is the right structure to drive further growth and value for shareholders by enabling both businesses to pursue their strategies independently, and it is keen to push ahead as quickly as possible. We are making good progress and will provide further details before the end of the month.”

Cable & Wireless intends to publish further information before the end of November 2009 which will include indicative timing.

In a separate release:

CABLE AND WIRELESS plc HALF-YEARLY REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009

• Group EBITDA up 30% to £463 million, an increase of £106 million
• Worldwide EBITDA increased by 44% to £205 million, including Thus
• CWI EBITDA of US$427 million, flat at constant currency
• Operating cash flow growth of 57% to £192 million
• Basic earnings per share increase of 41% to 4.8 pence
• Full year dividend expected to be 9.50 pence with 12% increase in interim dividend to 3.16 pence
• CWI EBITDA guidance revised to a range of US$880 to US$900 million due to weaker Caribbean trading partially offset by the consolidation of our Maldives business
• Demerger now underway CHAIRMAN’S STATEMENT

Commenting on the results, Richard Lapthorne, Chairman of Cable and Wireless plc, said:

“Today we have announced a good set of results especially when viewed against the recession. With the emerging signs of more settled conditions in the financial markets, the Board believes that the Group is ready to separate into its two operating businesses, Worldwide and CWI and drive further value for shareholders. We are keen to push ahead as soon as possible and further details will be published before the end of November.

“Worldwide’s performance in the first half of 2009/10 – growing market share and order book, winning new customers, strengthening its customer service and generating over £200 million of EBITDA – says much about how well positioned it is for the future.

“CWI delivered creditable results in the first half of 2009/10, with EBITDA in line with last year at constant currency. Panama, Macau and Monaco & Islands performed well, each of them increasing EBITDA year on year – no mean achievement in the midst of a global recession. Since the summer we have seen further deterioration in the Caribbean economy with no immediate signs of improvement. Consequently, despite robust management action, we are reducing EBITDA guidance for 2009/10. Nevertheless, CWI remains strongly cash generative.

“We are continuing with our progressive dividend policy and recommending an interim dividend of 3.16 pence per share – an increase of 12%. Subject to trading in the second half, we expect to pay a full year dividend of 9.50 pence per share, an increase of 12%, demonstrating our confidence in the current performance and the future potential of both Worldwide and CWI.”

Cable and Wireless plc (NYSE: CWP)