Cable & Wireless 'back on a growth track'

SHARES in Cable and Wireless, the international telecommunications group and owner of Mercury in the UK, rose by 23p to 777p after the company produced a better-than-expected 15 per cent increase in pre-tax profits to pounds 824m, excluding exceptional items, for the year to 31 March.

'We are back on a growth track,' said James Ross, chief executive, who forecast that the group could deliver 'double-digit' earnings growth for the foreseeable future, excluding the effects of currency changes, after recent stagnation.

He also said that, despite speculation about a link-up with a big international telecommunications group after last month's deal between British Telecommunications and MCI of the US, C&W was not seeking an alliance.

Pre-tax profits under the new FRS3 accounting standard showed a 43 per cent rise to pounds 918m including an exceptional profit on the sale of subsidiaries including the Mercury stake. Operating profits rose by 17 per cent and benefited by pounds 10m from currency changes.

The rise was driven by Hong Kong Telecom, of which C&W owns 58.4 per cent, which pushed Asia and Pacific profits up 16 per cent to pounds 563m.

A further boost came from Mercury, the fixed-line competitor to BT in the UK, where operating profits rose by 24 per cent to pounds 192m. Call volume is running 37 per cent higher than a year ago and ordered lines grew by 50 per cent. The company increased its domestic market share from 8.4 per cent to 10.5 per cent and its share of international traffic from 21 per cent to 24 per cent.

The dividend goes up by 12 per cent with a final of 14.85p. A one-for-one share split is also proposed.