Cable & Wireless Dismisses Takeover Talk

Cable & Wireless saw its share price up 4.76% at 195.6 pence Thursday on the back of full-year upbeat results.

But the UK telecoms company emphatically ruled out being a takeover target, calling it “market mischief making,” writes Thomson Financial News. It also dismissed talk of demerging its international arm from its and European, Asian and US businesses.

C&W will now focus on pushing ahead with its turnaround plan and deliver on its key financial targets by 2010.

C&W's market value has almost doubled from Gbp2.5bn to over Gbp4bn over the past twelve months, with improved trading and persistent bid speculation.

“We've not had any bid approaches. No one is stalking us and stories that appear in the press about a bid are blatantly inaccurate,” group finance director Tony Rice told journalists on a conference call this morning.

Recent reports have suggested that German telecoms giant Deutsche Telekom, or a number of private equity groups, may be interested in making a bid for C&W.

“As far as we are concerned, there is no imminent bid activity … it's just spurious speculation in the marketplace,” Rice added.

However, he acknowledged that the board did from time-to-time receive offers for various parts of the business. “There are always people keen to buy parts of the group … territories for example, but we're not sellers,” Rice continued.

Rice also dimissed talk of an early demerger or break-up of the telecoms group, despite an improved performance from the newly-created European, Asian and US business — formerly grouped together as the UK division — and new financial targets for both divisions.

“We're completely focused on delivering value. Any talk of a demerger or value realisation is premature. There are no plans to do anything soon,” said Rice.

Results from the group earlier today showed that profits — on an Ebidta basis — jumped by 20% to Gbp492m in the twelve months to end-March 2007, helped by a strong performance from the international division and a better-than-expected contribution from the European, Asian and US arm. The consensus forecast was for group profits of around Gbp456m.

Group pre-tax profits — including exceptional items — more than doubled to Gbp249m. Stripping out exceptional items, profits were little changed on the year at Gbp196m.

The major surprise, however, was the sharp increase in the total dividend to 5.85 pence a share — a 30% uplift from last time's 4.50 pence payout.

The market was also impressed by the speed and pace of the turnround in the European, Asian and US arm and the new guidance given for this year's Ebitda performance.

Profits from the European, Asian and US division increased to Gbp159m over the last year, compared to market expectations of around Gbp145m-Gbp150m, while the international business increased profits by 8% — on a constant currency basis — to Gbp430m.

The group is now predicting an Ebitda range of between Gbp210m-Gbp220m for the European, Asian and US business for 2007-08 and profits of between US$840m-US$860m for the international arm. For the group as a whole, Ebitda guidance is in the range of Gbp573m-Gbp608m for 2007-08.

“We're ahead of plan, but we're not changing our overall performance

targets,” said Rice. Today the group reiterated its target of Gbp2bn of revenues from its European, Asian and US business with a double-digit operating margin by 2010.

Cable & Wireless saw its share price up 4.76% at 195.6 pence Thursday on the back of full-year upbeat results.

But the UK telecoms company emphatically ruled out being a takeover target, calling it “market mischief making,” writes Thomson Financial News.

It also dismissed talk of demerging its international arm from its and European, Asian and US businesses.

C&W will now focus on pushing ahead with its turnaround plan and deliver on its key financial targets by 2010.

C&W's market value has almost doubled from Gbp2.5bn to over Gbp4bn over the past twelve months, with improved trading and persistent bid speculation.

“We've not had any bid approaches. No one is stalking us and stories that appear in the press about a bid are blatantly inaccurate,” group finance director Tony Rice told journalists on a conference call this morning.

Recent reports have suggested that German telecoms giant Deutsche Telekom, or a number of private equity groups, may be interested in making a bid for C&W.

“As far as we are concerned, there is no imminent bid activity … it's just spurious speculation in the marketplace,” Rice added.

However, he acknowledged that the board did from time-to-time receive offers for various parts of the business. “There are always people keen to buy parts of the group … territories for example, but we're not sellers,” Rice continued.

Rice also dimissed talk of an early demerger or break-up of the telecoms group, despite an improved performance from the newly-created European, Asian and US business — formerly grouped together as the UK division — and new financial targets for both divisions.

“We're completely focused on delivering value. Any talk of a demerger or value realisation is premature. There are no plans to do anything soon,” said Rice.

Results from the group earlier today showed that profits — on an Ebidta basis — jumped by 20% to Gbp492m in the twelve months to end-March 2007, helped by a strong performance from the international division and a better-than-expected contribution from the European, Asian and US arm. The consensus forecast was for group profits of around Gbp456m.

Group pre-tax profits — including exceptional items — more than doubled to Gbp249m. Stripping out exceptional items, profits were little changed on the year at Gbp196m.

The major surprise, however, was the sharp increase in the total dividend to 5.85 pence a share — a 30% uplift from last time's 4.50 pence payout.

The market was also impressed by the speed and pace of the turnround in the European, Asian and US arm and the new guidance given for this year's Ebitda performance.

Profits from the European, Asian and US division increased to Gbp159m over the last year, compared to market expectations of around Gbp145m-Gbp150m, while the international business increased profits by 8% — on a constant currency basis — to Gbp430m.

The group is now predicting an Ebitda range of between Gbp210m-Gbp220m for the European, Asian and US business for 2007-08 and profits of between US$840m-US$860m for the international arm. For the group as a whole, Ebitda guidance is in the range of Gbp573m-Gbp608m for 2007-08.

“We're ahead of plan, but we're not changing our overall performance

targets,” said Rice. Today the group reiterated its target of Gbp2bn of revenues from its European, Asian and US business with a double-digit operating margin by 2010.