C&W warns of bumpy recovery

FRANCESCO Caio, the new chief executive of Cable & Wireless, has warned investors to prepared for a roller-coaster ride as the telecoms giant begins its rehabilitation.

He said: 'It is inevitable that the performance of the group, particularly in the early stages of a challenging turnaround, will have its ups and downs.'

First-quarter revenues in Britain were better than expected, albeit flat, but there was an unusual downturn in the Caribbean, particularly Jamaica.

Total revenues fell by only 1% in the three months to the end of June at £974m, which includes £90m from the US operations that C&W is offloading. Caio said it was making progress in 'examining the options to achieve the least-cost exit from the US domestic business'.

C&W cut 1279 jobs in the past three months, of which 524 were in the US, reducing its total headcount to just under 20,000.

Caio said trading in the first quarter had reflected the three priorities he set out last month to deal with a maturing, and in some cases declining, market. These were to restructure in Britain, exit the US and deal positively with liberalisation in the Caribbean telecoms market.

C&W suffered a downgrade from debt rating agency Moody's last week.