Easynet, the broadband internet group, moved to concentrate on developing its high-speed internet offerings yesterday as it unveiled a £369m write-down on the value of its network and parted company with its chief executive.
The company, in which Marconi holds 72 per cent of the shares, said the "more cautious operating environment" had prompted it to scale back its wholesale division, which sells network capacity to other internet service providers.
As part of an associated cost-cutting programme, Easynet said David Rowe, the executive chairman, would resume the role of chief executive, replacing Neil Rafferty. The company said Mr Rafferty's departure was "amicable". He joined Easynet last June after it merged with Ipsaris, the broadband subsidiary of the struggling telecoms equipment maker Marconi. Mr Rafferty was on an 18-month rolling contract worth £300,000. Easynet will cut a further 90 jobs, saving £10m a year after an immediate cost of £7m.
Analysts welcomed Easynet's move away from the over-supplied market for carriers, which will lower the group's cash burn rate. One analyst, who did not wish to be named, said: "It is a good indication of how focused the management is on its existing business."
Easynet, which posted a pre-tax loss of £292.7m for the year to the end of December after exceptionals, said following its merger with Ipsaris it had £205m of cash to invest in the business. Its loss before interest, tax, depreciation and amortisation widened to £31.9m from £6.5m in 2000, reflecting the start-up position of the network. Turnover from continuing operations rose 89 per cent to £78.7m.
Its shares rose 11 per cent to 147.5p, just off a record low.
The market remains concerned about the possibility of Marconi dumping its stake in Easynet.Reuse content