LONDON (Alliance News) - Telecommunications company Cable & Wireless Communications PLC on Thursday said it swung to a small pretax loss in the first half due to increased costs which offset higher revenue, and said it would not pay an interim dividend as its talks with Liberty Global PLC go on.
The FTSE 250-listed company, which has operations in the Caribbean and Central America, said its pretax loss for the half to the end of September was USD1.0 million, driven by one-off operating and finance costs it booked and higher depreciation and impairment charges. This compares to a USD132.0 million profit a year earlier.
Revenue for the group rose to USD1.18 billion, however, up from USD848.0 million following a very strong performance in its Caribbean business. The group also delivered margin improvements for its Panama and Bahamas operations, helping to improve its earnings before interest, taxation, depreciation and amortisation by 4.0% in the first half to USD427.0 million from USD412.0 million.
In addition, the group has increased its guidance on operating cost synergies to USD125.0 million, with USD110.0 million of this yet to feed through into the business.
"Our company has significant growth and synergy potential. Whilst we are in the first phase of our 3 year plan, we are pleased with initial progress and expect to deliver a strong second half and full year performance in line with outlook," said Phil Bentley, the group's chief executive, adding it expects a further robust performance in the second half.
The group did not declare an interim dividend due to the talks it is currently holding about a possible takeover offer from US cable company Liberty Global, though it will pay an interim dividend if those talks do not lead to an offer.
The pair disclosed the talks in October and are in discussions about a possible cash and shares takeover bid for Cable & Wireless.
Cable & Wireless Communications shares were up 0.4% to 74.35 pence on Thursday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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