Cable & Wireless UK records recovery

The once ailing UK arm of telecoms company Cable & Wireless has made such a recovery that its parent company says it could soon stand on its own again.

The UK business, which is the country's second-biggest corporate telecoms provider after BT, has beat forecasts with a 23% rise in underlying earnings.

This means that, for the first time "in recent memory", says The Telegraph, the company has generated cash.

The telecoms group is now considering "demerging" the UK arm from the international business, and says that this could happen "within a few months".

When asked about a potential demerger of the UK business - recently renamed Europe, Asia, and the US (EAU) - Tony Rice, finance director, said: "We have still got to nail down further progression on cash flow, we need a self-standing EAU business - a good performance in the next few months and it will be self-standing from a credit point of view".

"There are a number of options. Obviously there is a demerger, rationalisation of the portfolio [selling EAU or international] or leveraging and returning capital to shareholders, and we're looking at all of those."

"We're talking about doing something in 2008 and 2009."


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