Cable & Wireless Worldwide pension fuels full-year loss of £94m

Cable & Wireless Worldwide, the mostly-UK-based provider of telecoms services for multinational companies, fell to a full-year loss of £94m.

Cable & Wireless Worldwide was created following last year's demerger of Cable & Wireless.

The company, created following last year's demerger of Cable & Wireless, was hit by £210m of exceptional charges, including £143m to cover the deficit in its defined benefit pension scheme.

CWW also suffered £13m of charges relating to the demerger, which split the business from Cable & Wireless Communications – the operator of consumer telecoms businesses in the Caribbean. CWC reports maiden full-year results today.

CWW's top 14 managers collected a further £9m from the latest installment of its controversial long-term incentive plan (LTIP) on top of the £35m C&W paid out last year before the demerger. The managers are in line for one further payout next year before the introduction of a less generous scheme.

Jim Marsh, chief executive, defended the private-equity style bonus scheme as a means to help turn the company around from its dire position in 2006.

Sales in the year to March 31 came in roughly flat at £2.27bn. It suffered a pre-tax loss of £94m, compared to a £65m deficit a year earlier on a proforma basis.

Mr Marsh said the company was experiencing "good momentum" as hard-pressed companies outsource their telecom operations to CWW.

However, Jonathan Groocock, an analyst at Investec, warned that "the competitive threat from a revitalised BT and potential for cost inflation to return dampens the outlook for profits".

Source: The Telegraph, 26th May 2010

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