C&W Chops & Changes
The news that it would reduce costs further by cutting 600 jobs and closing its London headquarters, added to plans for a £250 million (US$462 million) share buyback program, sent C&W's share price up by 25 cents, more than 4 percent, to $6.39.
The carrier reckons it can save £50 million ($92.3 million) a year by 2006 as a result of the latest measures, which include shifting its headquarters out of London and into the nearby county of Berkshire (pronounced Barkshire for those who don't want to be embarrassed on their next trip to the U.K.).
As expected, there were some changes in the senior management ranks as C&W reached the half-way mark in its three-year reorganization program (see Eurobites: Sometimes It Bs Like That). Those changes include the departure of the CEO of the U.K. operation, Royston Hoggarth. His role, including the management of C&W's assault on the British broadband market, will now be assumed by the carrier's top dog, CEO Francesco Caio.
That assault will be based on the broadband access business called Bulldog Communications Ltd. that C&W acquired earlier this year, and will involve a major investment in unbundling the local loop in the U.K. (see C&W Buys British Bulldog and C&W Has $150M Broadband Plan).
And with much of the reorganization of the carrier complete, following the disposal of assets in the U.S. and Japan, COO Kevin Loosemore is now surplus to requirements and will leave in December (see C&W Sells Japanese Unit and Savvis Acquires C&W US Assets).
That doesn't mean C&W will not keep an eye on potential opportunities overseas. Chairman Richard Lapthorne notes that C&W "will take opportunities to expand our footprint into new geographies when appropriate.”
To that end, C&W appointed a man with two surnames, Harris Jones, to the board position of executive director of international businesses. Former T-Mobile (UK) chief Jones (or is that Harris?) will join on December 1, and confuse the living daylights out of the company's internal directory manager.
So what of the latest numbers? Revenues in the first half of the financial year (to September 30) were £1.62 billion ($3 billion), which met with analysts' expectations. Pre-tax profits were £199 million ($368 million), higher than the expected £171 million ($316 million). The earnings per share of 5.1 pence was higher than the expected 4.5 pence.
Capital expenditure, at £124 million ($229 million), was much lower than the analyst consensus of £185 million ($342 million), according to Lehman Brothers.
C&W finished September with £1.4 billion ($2.6 billion) in net cash.
— Ray Le Maistre, International News Editor, Light Reading