Shake-up as C&W dives into the red

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The Independent Online

The telecoms company Cable & Wireless plunged into the red yesterday after taking a £4bn write-down as it confirmed a management shake-up that will see both a new chairman and a new finance director join the board.

The moves came as the company said market conditions in the sector remained "volatile" and predicted it would remain tough for ano-ther year. "The turmoil over the last six months has been even more dramatic," Graham Wallace, its chief executive, said.

Nevertheless, Mr Wallace said he believed the company's £2.6bn cash pile would be key in helping it win new customers by convincing them, that unlike many of its rivals, it was not facing financial difficulties.

The tough market conditions were close to claiming another victim yesterday as the Dutch telecoms company KPNQwest warned it needed funding to avoid a cash crunch.

C&W yesterday reported a £4.7bn pre-tax loss compared with a profit of £3.6bn a year earlier after writing down assets by £2bn and goodwill by a similar amount. Sales were £5.9bn in the year, down from about £8bn.

While the figures were in line with recent guidance, shares in the company dropped almost 3 per cent, to close at 201p. The company expects revenues at its core Global division in the six months to 30 September to grow by zero to 10 per cent, compared with the previous six months, but refused to give guidance further out.

C&W, which also unveiled plans to restructure its US operations that could result in another 1,000 job losses, said yesterday it planned to cut back capital expenditure to about £950m for the current year.

Sir Ralph Robins, its 69-year-old chairman, will retire from the board at the end of December and will be replaced by David Nash, a non-executive director. Robert Lerwill is stepping down as finance director to concentrate on his role at the head of the company's Regional division. Mr Lerwill, who is being replaced by David Prince, will become deputy chief executive of the group.Two new non-executive directors will also be appointed.