Shares in the corporate telecoms group plummeted as much as 16% in morning trading, after it said core earnings would be between 5% and 10% below market expectations because of delays in signing contracts and a poor pipeline of sales coming through. Its shares had only gained a little composure in the afternoon session, still stadning over 14% lower at 44.89p.
The FTSE 250-listed also halved its dividend for the current financial year from 4.5p to 2.25p.
Cable Wireless said sales in the first 10 weeks of the year had been slower than expected and that this trend, combined with a lower than projected sales pipeline indicates that the gross margin outturn is "now expected to be somewhat below current market expectations".
The grim news caused chief executive Jim March to surrender his resignation and current chairman John Pluthero takes over his role. Senior independent director John Barton becomes chairman of the company and his role is picked up by Penny Hughes.
"Clearly it has been a very difficult 12 months and it is now important that we take the necessary steps to ensure the future growth of our business," said John Pluthero. "I'll be looking to take a more radical approach to building on our hosting, cloud and data services business whilst becoming more competitive and efficient in the mature product areas. It has been easy to lose sight of what this business could be; it is my intention to reassert and realise that future."
Pluthero was chief executive of the original Cable Wireless and is known for turning the business around before it split last year.
Originally posted 2011-06-29 04:32:41.