Cable & Wireless reports record turnover in 1981
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This is a digitised version of an article from The Cayman Compass's print archive. Occasionally, the digitisation process introduces transcription errors, or other problems.
See the article in its original context from October 1981.
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The group profit before taxation amounted to 62,047,000 Pounds Sterling compared with 61,016,000 Rounds Sterling in 1980.
The profit after taxation and before an extraordinary item was 38,649,000 Pounds Sterling (1980 41,994,000 Pounds Sterling).
Some changes in the structure of the group (in Hong Kong and Bahrain) have now made it necessary to reinstate a deferred tax provision of 68,000 Pounds Sterling. This represents the amount the group may have to pay within the foreseeable future and is treated as an extraordinary item.
The dividend is 12,500,000 Pounds Sterling (1980 Pounds Sterling 500,000). The earnings per share are 38.7P (1980 42.0P) and the dividend per share 12.5P (1980 10.5P).
Total capital employed was 337,119,000 Pounds Sterling (1980 Pounds 259,304,000).
For the first time, and in accordance with the new accounting standard, current cost accounts have been included. They include the adjustment for supplementary depreciation which had previously been shown in the historical cost accounts.
The chairman, Mr. Eric Sharp, points out that 99 per cent of the group's turnover arises overseas and that all results in the accounts have to be expressed in sterling. He says:
In spite of the strong pound over the period under review, I am pleased to report that the turnover increased by 15 per cent to an all time high of almost 293,000 Pounds Sterling, the profit before tax increased to 62,000 Pounds Sterling. From 61,000 Pounds Sterling."
The British Government has announced that it intends to offer for sale just under 50 per cent of the shares in Cable and Wireless. The chairman says: "The directors welcome the prospect of the commercial freedom this will offer and I am confident that our staff, both in the U.K. and overseas, will respond effectively to the increasing challenges and opportunities that the new quoted company environment will create."
The most significant part of the business of the group continued to be franchises for public telecommunications activities. The turnover measured in sterling understated the underlying growth during the period of a strengthening Pound. Nevertheless it had increased by some 7 per cent to a record level of almost 180,000 Pounds Sterling.
Mr. Sharp outlines the new arrangements in Hong Kong and Bahrain, both of which have been the subject of recent announcements. He also refers to the agreement reached for a joint venture for the development of telecommunications services in Macau.
"The passage of the British Telecommunications Bill through Parliament provides interesting and exciting opportunities which the group has both the ability and the experience to exploit," Mr. Sharp says. He mentions the proposed new telecommunications network, "Mercury," which Cable and Wireless plan to operate through a consortium with British Petroleum and Barclays Merchant Bank.
The development nature of the group's operations has for some time pointed the need to decentralise profit responsibility, as far as is appropriate and practicable, resulting in a policy to transfer some management and supporting functions, which throughout the history of the group have been centralised in London, to each operating unit. This will inevitably lead to a restructuring of the organisation at head office: discussions are proceeding with the staff and trade unions concerned.
Finally, Mr. Sharp says: "We have the human and financial resources to take full advantage of the exciting opportunities ahead of us both at home and overseas and I am confident that the group is positioning itself effectively to meet the challenge of international competition and the growing and exacting demands of the telecommunications market."
