Strategic Finance
Cable and Wireless Worldwide plc stock slumps on HI loss |
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| Strategic Finance | |
| Written by Zarina de Ruiter | |
| Tuesday, 15 November 2011 | |
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Shares fall more than 10 per cent after the telecom company swung to a pre-tax loss of £443m from a year-earlier profit of £34m. Cable and Wireless Worldwide plc (LON:CW) stock dropped 10.10 per cent to 27.15p as the struggling telecoms firm, infamous for its generous executive remuneration, sees its underlying profit before tax in the six months ended September tumble to £35m from £64m the year before, on revenue that eased to £1,072m from £1,123m. However, once goodwill impairment of £436m, a deferred tax asset write down of £146m and a £42m write off of obsolete assets are taken into account, the company fell into the red, with a pre-tax loss of £443m, versus an "as reported" profit of £53m the year before. Against that background, the group has suspended future dividend payments until further notice, though it will pay an interim dividend of 0.75p this time round. Change of CEOGroup chief executive officer (CEO) John Pluthero is to leave the business in March 2012, to be replaced by ex-Vodafone man Gavin Darby. Pluthero was formerly chairman of Cable & Wireless Worldwide, and took over from Jim Marsh as chief executive in June of this year when Marsh made an abrupt departure, pausing only to collect £650,000 in lieu of a year's salary. Pluthero was immediately given a £75,000 pay rise to £675,000 per annum when he took on the CEO role. Shares in the company are at about one-third of the level they were when Cable & Wireless was split in twain at the end of the first quarter of 2010. |
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