Telecoms provider Cable & Wireless has postponed its plans for a demerger.

Telecoms provider Cable & Wireless (C&W) has postponed its plans for a demerger, as it announced first-half profits and increased full year guidance*.

C&W reported earnings before interest, tax, depreciation and amortization (EBITDA) up 26% at £357 million for the six months to end September after turning around its two divisions. It posted revenues up 5% at £1.6 billion ($2.51bn).

The country’s second biggest corporate telecoms provider after BT Group, C&W announced that it was considering a demerger of its two divisions during this financial year, which would have led to separate listings of the UK and international divisions in the first half of next year and, subsequently, the potential sale of one or both of the divisions.

Commenting on the results, Richard Lapthorne, Chairman of C&W plc, said: “Whilst our trading position is in good health, the same cannot be said of the financial markets which are extremely volatile and which currently provide no basis for proper financial planning.

“Consequently, we have postponed a final decision on value realisation until we can foresee a sustained period of normality returning to the financial markets.”

He continued: “We’re increasing the interim dividend by 13% to 2.83 pence per share. This reflects our confidence in the sustainable prospects for both businesses together with our growing visibility of the cash generation potential of Europe, Asia & US as it continues to deliver its strategic plans and objectives. We’re confident about our outlook – consequently we’ve raised EBITDA guidance and the interim dividend.”

The group EBITDA guidance for 2008/09 was increased to at least £780m at an exchange rate of $1.88 to £1.

C&W increased guidance for the Europe, Asia & US (EAU) division, formerly known as the UK division, to at least £325m following the acquisition of the small telecoms company Thus, and improved trading of the existing business.

It increased guidance for its International unit to at least £576m ($910m).

*Information that a company provides as an indication or estimate of their future earnings.