Cable and Wireless is to withdraw from the US after reporting a continuing operating loss of £207 million from a turnover of £4.2 billion.
‘Our US subsidiaries make losses, consume cash and require significant management attention. Both hosting and IP services are businesses that have limited interaction with the rest of the Group and are not central to our plans. They may have value to the right owner but they are not sustainable for us with their current cost structure,’ said Francesco Caio, the company’s Chief Executive Officer.
In the UK, one of the world’s largest telecoms markets, Cable & Wireless’ market share is second only to BT. But while the UK business makes a positive EBITDA, its loss before tax is ‘unsatisfactory’ according to the company. As a result, the company envisages approximately 1,500 redundancies over an 18 to 24 month period.
Once the restructuring plans are completed, Caio’s expects to see a business with turnover of approximately £3.5 billion generating a double digit operating profit margin.
Cable & Wireless closed the year with total cash balances of £3,165 million. Total borrowings were £1,546 million, of which long term debt was £721 million. The net cash balance was £1,619 million. Cable & Wireless believes this provides the necessary liquidity to carry out its restructuring plans.