C&W Worldwide to reveal it has a spare cash pile

Cable & Wireless spin-off to update market on its growth strategy after turbulent 2010
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The Independent Online

Cable & Wireless Worldwide is expected to have spare cash for the first time in its history this week and provide new details on its growth strategy.

A consensus of 17 analysts expect the the FTSE 250 voice and data communications company to have free cashflow of around £49m when it announces its first full-year of results as an independent company.

Cable & Wireless demerged last year into the Worldwide and Communications businesses.

The latter works primarily in the Caribbean, Panama, Macau and Monaco at all levels of the market, while Worldwide focuses on corporate business. The Worldwide business is understood to have not produced free cash flow, which is money left after capital expenditure, even when the companies were combined.

The news will be a boost after what has been a turbulent year for Worldwide. It dropped out of the FTSE 100 and has been a takeover target. Singtel, the Singaporean telecommunications company, is known to have considered a bid and even hired bankers to look at a potential deal.

The problem for Worldwide's chief executive, Jim Marsh, and its chairman, John Pluthero, has been the decline in traditional voice communications, such as fixed telephone lines. The company is now looking to grow in data centre infrastructure, where capital expenditure is less costly, so allowing for the extra cash.

These services include providing space for clients' large IT servers and helping them hold data in virtual technology, such as the cloud online storage system. Mr Marsh and Mr Pluthero will tell the market how it will develop this business further, which should help boost shares as the work has high profit margins.

Another big name reporting this week is retail giant Marks & Spencer. It's chief executive, Marc Bolland, is expected to announce that the group will focus on developing its upmarket clothing ranges

Analysts predict it will post a 12 per cent rise in full-year profit. The consensus estimates an underlying pre-tax profit of £710m, up from £632.5m in 2009-10.

M&S is also expected to raise its dividend, with analysts on average forecasting a total payout of 16.5p, up from 15p.

Mr Bolland has already made his mark on the business since he joined a year ago. He has hired Laura Wade-Gery, the former Tesco online chief, who will sit on the board when she joins next month. He has also announced plans to take M&S back into Paris.

Also this week, bank-note printer De La Rue will look to ward off potential predators when its boss, Tim Cobbold, announces the results of a strategic review beside its annual figures on Tuesday.

Pre-tax profits should be more than £30m, but this will still represent a severe decline on the £96.6m made last year. Revenue could fall more than £100m from £561m, while Numis Securities is forecasting a dividend payment to investors of 26p per share.

Commodities trader Glencore will also finally complete its long-awaited flotation, sailing into the FTSE 100 index on Tuesday. Engineer Invensys and asset management group Investec are both trying to avoid being the company relegated to the FTSE 250 as a result.

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