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Cable & Wireless, the alternative telecoms group, has revealed more details of the wide-ranging restructure it announced in February that will split the company into two divisions.
On Thursday it said that Charles Herlinger, finance director, would leave at the end of May and Tony Rice, a non-executive director, will take on the new role of group managing director and central and finance director.
“The task facing the executive directors over the past three years has been neither straightforward nor easy and I would like to thank Charles Herlinger for the tireless efforts he has made during his time as CFO,” said Richard Lapthorne, chairman.
The telecoms group, whose share price has plummeted since last summer, issued a profit warning in late January and said its 2006 earnings would be affected by several non-recurring items, which had also affected results from previous years.
A month later, Mr Lapthorne announced that Francesco Caio, chief executive, would leave the company on April 1 and be replaced by John Pluthero, former chief of Energis, which was acquired by C&W in 2005. It also said that up to 3,000 of its 5,500 UK jobs would be cut as part of efforts to return the company, which has been the subject of recent takeover speculation, to growth. C&W is set to disconnect thousands of small UK business users in order to focus on more profitable customers.
C&W will be split into two divisions, UK and International, from April 1, each with its own operating board and balance sheet. Mr Rice’s role will cover both divisions, while Lord Robertson, co-deputy chairman of the board, will retire from that role on April 1 to become chairman of the international division. Graham Howe, senior independent director and Rob Rowley, group deputy chairman will both retire at the company’s annual general meeting in July.
“When we started the task of putting Cable & Wireless back on track, I had to find senior managers who were prepared to risk their reputations in order to help both me and the Company. Bernard Gray, Tony Rice and Rob Rowley responded right at the beginning and were joined soon after by Graham Howe and Kasper Rorsted,” Mr Lapthorne said.
“Without the commitment and wisdom of that early group, I doubt if we would have been able to overcome the survival challenges facing us at that time and achieve a further total shareholder return of over 150 per cent in three years, placing it in the upper quartile of performance for its industry peer group.”
The company also said a new management incentive scheme would be introduced. “This is not yet final but is designed to reward the management teams in each business in proportion to the shareholder value created by that business,” it said.
Shares in C&W rose ¾p to 108½p in early afternoon trading.