C&W returns to dividend list and buys into Monaco

Cable &Amp; Wireless, the telecoms group, announced it was buying a controlling stake in Monaco Telecom from Vivendi Universal for €162m (£108m) yesterday and said it would be reinstating dividend payments to shareholders earlier than expected.

Cable &Amp; Wireless, the telecoms group, announced it was buying a controlling stake in Monaco Telecom from Vivendi Universal for €162m (£108m) yesterday and said it would be reinstating dividend payments to shareholders earlier than expected.

Unveiling annual results that showed it had stopped the rot in its core UK business, which had suffered falling sales for three years, C&W said group revenues had been maintained after stripping out the effects of the weakening dollar. Pre-tax profits before exceptionals rose from £79m to £317m. It will pay a 3.15p dividend per share for the year.

After completing the sale of its US businesses the company has £1.5bn cash on its balance sheet. The chief executive, Francesco Caio, said C&W was seeking to invest about £70m this year on broadband internet access products for its customers.

However, Mr Caio refused to forecast any revenue growth in the coming year, saying the group had completed the first year of a three-year plan to stabilise the business, reconstruct it and then look for growth in the 2005/06 financial year.

He said C&W had stabilised the business by reducing costs and capital expenditure and introducing new lines of management responsibility in key markets such as the Caribbean. Group revenues were £3.38bn for the 12 months to 31 March compared with £3.67bn in the previous year. In the UK sales stabilised at £1.66bn, halting the 6 per cent decline in each half year for the past three years. The company achieved an operating profit of £33m in the UK before exceptional charges.