LONDON (Alliance News) - Cable & Wireless Communications PLC reported higher operating profits and revenue for its last financial year, as it saw growth across its mobile, business and video businesses and continue to strip out costs, but said it has much more to do if it is going to realise the full potential of the business.
The company reported earnings before interest, tax, depreciation and amortisation of USD585 million for the year to end-March, up from USD546 million a year earlier, as revenue rose 4% to USD1.75 billion from USD1.27 billion, its gross margin improved and it cut operating costs by 2%.
However, its net profit declined to USD253 million from USD859 million as gains on disposals dropped by two thirds.
The year marked the first year of the company's new strategy and USD1 billion investment plan aimed at growing the company and improving its lagging performance. It has decided to focus on the Caribbean and Latin American markets. That has involved selling some businesses and buying others. It sold its Monaco Telecom business for USD445 million in May 2014 and its stake in Solomon Telekom for USD16.5 million in October. It bought Sonitel in Panama for USD41 million and Columbus International Inc for USD3.03 billion.
"We have made good progress in executing our strategy and we are beginning to uncover the full potential of our business. CWC is on the way to becoming a better company - a genuine quad play operator, with strong market shares in the geographically focused and attractive Caribbean and Latin American markets. We see good long-term growth prospects across Consumer, Business Solutions, and Networks businesses, underpinned by our differentiated submarine and terrestrial fibre networks and full service offering," Chief Executive Phil Bentley said.
Cable & Wireless said its mobile, business-to-business and video lines all grew in the last financial year, and it said it was also encouraged by the response to refreshed tariffs and new products in its fixed-line business. However, it was disappointed by growth of just 1% in its broadband business, but said its Columbus buy should meet some of its challenges like improving network speeds.
"Although we face increasingly competitive conditions within some markets, for example with the introduction of mobile competition in The Bahamas later this year, we expect to continue making good progress in growing our revenue and reducing our operating cost base. In addition, we expect to benefit from revenue, operating cost and capital expenditure synergies following our acquisition of Columbus," it said in its outlook statement.
It said it will pay a final dividend of USD2.67 cents bringing its full-year dividend to USD4.00 cents, the same as in the previous year.
Cable & Wireless Communications shares were down 1.8% at 1.08 pence in London early Tuesday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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