Cable and Wireless blames coalition for poor future performance

Cable and Wireless is set to announce disheartening end-of-year results

Cable and Wireless has blamed the coalition government for its lacklustre financial performance in 2010.

The firm said that since the new government's emergency Budget in late June, non-contracted spending in the UK public sector has slowed “very significantly” and has warned that this will have a negative impact on its 2010 financial results.

“Given the nature of our public sector business, this reduction will adversely impact trading in the current year,” said the firm in a statement.

“Nevertheless, we are supportive of the overall approach being adopted by government and believe that our unique product set provides us with significant opportunity in this area over the medium term.”

The company added that it expects “somewhat slower growth” in earnings before interest, tax, depreciation and amortisation (EBITDA) for the full year, with its forecast now “around the lower end of the range of expectations”.

Cable and Wireless shares dropped as much as 17 per cent in London trading after admitting 2010 profit will be poor.

“In light of the downturn in public sector activity, we have stepped up our cost reduction initiatives and now expect total operating expenditure to reduce year on year,” the company added.