Cable & Wireless restructures and warns on profits

Cable & Wireless watched its share price fall more than 15 per cent this morning after it warned that profits would be lower than expected and waved goodbye to its chief executive.

Francesco Caio is to leave the company at the end of the financial year because there will no longer be a post of group CEO. The company is being split into two divisions - UK (including Bulldog) and international.

Caio said: "Over the last three years we have transformed Cable & Wireless from an unfocused business into a group of telecom operators relevant in each of their markets. This has been achieved against a background of unprecedented change in the industry....notwithstanding the continued pressures, particularly in the legacy voice market, the robust performance of the former Energis business together with the promising progress that is being made with Bulldog means that we continue to have confidence in the medium-term financial objectives for the UK business announced last November."

John Pluthero will be UK group managing director and chairman from the start of the new financial year. Jim Marsh will be chief executive of UK business. For the international division, Harris Jones will be group managing director and chief executive, while Lord Robertson becomes chairman of international but keeps his job as deputy chairman of the group. Richard Lapthorne is group chairman.

The company also warned that Ebitda is likely to be no higher this year than last. The company blamed continued margin erosion, high levels of churn, and quicker movement from legacy to IP networks. Costs associated with the restructure were also blamed.

There will be a further market update on February 28.

Read the whole statement on C&W's website here.®