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Recession forces C&W bosses to keep it together

Stock market chaos blamed

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Cable & Wireless is delaying its split into two businesses, blaming crazy market conditions rather than its own trading.

The company was expecting to split off its Europe, Asia & US business from the rest of the group, but has now postponed a final decision while the markets sort themselves out.

Richard Lapthorne, chairman at C&W, said: "Whilst our trading position is in good health, the same cannot be said of the financial markets which are extremely volatile and which currently provide no basis for proper financial planning. Consequently, we have postponed a final decision on value realisation until we can foresee a sustained period of normality returning to the financial markets."

C&W beat estimates for its performance in the last six months ended 30 September 2008. Group revenues were up 5 per cent to £1.6bn and group Ebitda, excluding exceptional items, was up 26 per cent to £357m. C&W bought Thus in October and expects to spend £78m integrating it. Group operating profit was £135m compared to £165m in the first six months of 2007. Profit before tax was £129m.

Dividend per share will be 2.83p compared to 2.5p for the first half of 2007. More details downloadable from here.

C&W said Europe, Asia and US enjoyed record sales in September and the company sees no sign of recession. It expects Ebitda for the first half of 2008/2009 to be at least £325m.

The company is also making management changes ahead of any possible float. John Pluthero steps down as exec chairman of C&W's international business but stays on as executive chairman of Europe, Asia and US. Tony Rice moves from group finance director to chief executive of International while Tim Pennington becomes chief finance director as well as CFO of International. ®

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