CWW tanks after warning on its profits

 
Steve Dinneen
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CABLE & Wireless Worldwide’s (CWW) shares plummeted more than 14 per cent to 54.2p yesterday after shocking the market with a profit warning.

It downgraded its expectations for core earnings next year on weaker-than-expected demand for voice services and anticipated lower prices for data services.

It said it does not expect to increase its Ebitda in the next year, despite analyst expectations that they will rise from about £444m to £470m.

The company said it was being squeezed by higher rents and energy costs while it had to cut prices to retain basic data connection contracts and its voice business declined.

However, it said it was on track to hit the current year’s targets after a string of contract wins in the second-half. The blow comes after the firm has already faced pressure from the UK government from its spending cuts last summer. Shares in the group have fallen 29 per cent since it demerged from the former Cable & Wireless a year ago.

Chief executive Jim Marsh said: “Some of our competitors are being very competitive in their pricing in order to dislodge us from our customers. We are not losing customers in that respect. However, if other people in the market are being very aggressive in pricing we need to make sure we are giving our customers fair pricing.”