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Cable and Wireless plc (CWP) Message Board

  • hipcats3 hipcats3 Nov 11, 1998 4:32 PM Flag

    Making all the right moves

    The future is looking good for this company.



    CWC: Telecoms group rings up strong
    growth
    By Alan Cane

    Cable and Wireless
    Communications, the UK's largest cable-television-to- telephony
    group, returned to profit in the first half of the year
    despite substantial investments in infrastructure and
    measures to cope with the millennium bomb.


    The
    group recorded a profit, before and after tax, of �65m
    in the six months to September 30, compared with a
    loss of �135m last year. Underlying profits before
    tax, after stripping out the effects of �200m
    restructuring costs last year and an �8m millennium bomb charge
    this half, came to �73m (�65m).


    Earnings
    before interest, tax, depreciation and amortisation
    increased 17 per cent to �390m. Underlying earnings per
    share improved 12 per cent to 4.9p.


    Turnover
    increased 14 per cent to �1.26bn helped by powerful growth
    in data, video, internet and advanced services.
    Graham Wallace, chief executive, said the proportion of
    total turnover from the faster-growing parts of the
    business had increased from 20 per cent to 25 per
    cent.


    "Many our our activities in the last six months were
    aimed at improving customer service and productivity.
    The outsourcing of commercial information technology
    to IBM will increase the speed of delivery of
    improved systems into the business," he
    said.


    All four business units showed growth. Consumer
    markets showed a 20 per cent improvement to �139m chiefly
    through a 29 per cent improvement in telephony revenues.
    International and partner services grew 22 per cent to �450m
    and CWC now claims to be the ninth largest carrier of
    international traffic.


    It intends to spend �75m
    dealing with the millennium
    bomb.


    Comment
    CWC is investing heavily in a national network
    running on the most modern technology and using internet
    protocols. It has sensibly outsourced its sorry collection
    of information technology systems to IBM and it will
    introduce interactive digital television, probably in early
    summer next year. Television accounts for only �108m of
    its �1.26bn total revenues. Digital television,
    however, is just another form of data and data services
    are growing rapidly. Revenues and profits should
    continue on an upward track and, at 474p, the shares look
    cheap.


    � Copyright the Financial Times
    Limited1998

    "FT" and "Financial Times" are trademarks of The
    Financial Times Limited.

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