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Cable & Wireless reorg eats ’97 profits

Sales up 12%

LONDON — Cable & Wireless Communications, the U.K.’s biggest cable operator, has posted a pre-tax profit of £151 million ($247.6 million) before exceptionals for 1997, up 110%. Sales were up 12% to $3.74 billion.

After an exceptional charge of $328 million, however, which the company said was related to “fundamental reorganization costs,” the result for the year was a loss of $80.4 million.

Positive results

CWC’s television sales for the year were $305 million, up 30% on the back of 26% growth in cable TV subscriptions, now totaling 780,000 homes. The company said that early results for its pay-per-view movie service, which launched in January, were “very positive” with take-up rates “higher than expected.”

Cable merger

CWC was created last year through a four-way merger between the telco Mercury and cable operators Nynex, Bell Cablemedia and Videotron. CWC said it had achieved cost savings of $223 million through the integration of the companies.

Graham Wallace, CWC chief exec, said: “Significant cost savings and operating efficiencies have been achieved … the merger created the critical mass necessary to invest in marketing, service and infrastructure.”