C&W Turns a Corner
The operator's share price leapt nearly 8 percent, by 50 cents to $7.06, on news that U.K. sales remained level after a three-year decline, and that it will pay a higher-than-expected dividend of 3.15 pence (5.8 cents) per share, including a back-dated interim dividend of 1.05 pence (1.9 cents).
Revenue for the year ended March 31 fell from £3.68 billion ($6.77 billion) to £3.38 billion ($6.23 billion), but profit (before tax and exceptional items) jumped from £79 million to £317 million. Net cash was £1.45 billion ($2.66 billion) as of March 31.
These improved results follow a radical restructuring during the past year by the company's new management, including the sale of the carrier's troublesome U.S. operations to Savvis Communications Corp. (Nasdaq: SVVS). (See Savvis Bulks Up, C&W Puts New Duo in Charge, and C&W Sells Euro Businesses.) And investors are relieved to see C&W's net loss fall from a whopping £6.53 billion in 2003 to £237 million ($434 million).
C&W also announced it has bought a controlling stake in Monaco Telecom for €162 million ($198 million) in cash, its second purchase in a week (see C&W Buys Into Monaco Telecom ). It announced the acquisition of British business broadband operator Bulldog Communications Ltd. last week for £18.6 million (see C&W Buys British Bulldog).
— Nicole Willing, Reporter, Light Reading