Cable & Wireless Worldwide
The group, which had already dispensed with senior executives after three profit warnings in less than a year, said CEO John Pluthero would be replaced by Gavin Darby, who will start on November 28.
Analysts interpreted the string of exceptional items as a necessary move to secure the services of Darby to turn the company around and regain the trust of investors.
He's well respected, he's a big hitter at Vodafone, he will not want to walk into a business like this and have his reputation destroyed over the next two years, analyst Will Draper at Espirito Santo told Reuters.
So I imagine part of his price for taking this on is that a lot of things needed to be cleaned up.
The group announced one-off items totalling 624 million pounds, agreed a 100 million pound payment into its pension fund and froze future dividends after its interim payout in January.
The one-off items pushed the group to a half-year loss of 443 million pounds.
Pluthero, whose remuneration had been a bone of contention with investors, will leave the business in March 2012.
He told reporters he had no regrets over taking a 10 million pound bonus from a private-equity style incentive plan in the three years before the business demerged from Cable & Wireless Commercial
The business isn't that far off track, he said. I'm sure the package of measures we're announcing this morning will encourage shareholders to get behind the business in the coming months.
Darby, who left Vodafone in 2010, will have an annual salary of 600,000 pounds and the potential for a bonus and shares in his new job.
Shares in the group were down 10 percent at 27 pence, compared with a peak of 98.5 pence shortly after the demerger.
Why chase CWW here? Mark James of Liberum Capital asked. No free cash flow, a revolving door of executives, no dividend any more and no growth. We remain sellers. CWW, despite the demise in the share price, continues to look singularly unattractive versus its peers.
C&W Worldwide, which competes with BT
The profit warnings have been blamed on austerity measures by the British government, pricing pressure on core data services and higher energy and rental costs. Its traditional voice business has also declined faster than expected.
Pluthero noted that trading had become extremely volatile in the last six months, with corporations taking longer to commit to new contracts.
I think it will take two or three more months of the euro zone edging towards the right answer before they really feel confident about putting their hands in their pockets again, he said, explaining that their UK customers did much of their business in Europe.
There's proper caution out there today.
Espirito's Draper noted, however, that underlying trading in the first half had been broadly in line with consensus, with revenues for the six months flat at 1.1 billion pounds and core earnings down 11 percent at 190 million pounds.
But the group failed to outline a clear strategy for the future, and Draper said there was concern that the new CEO would take time to decide how best to focus the business.
You could see this, you would hope, as marking the low point for Cable & Wireless, he said. But there are still some risks. We really don't know what Gavin Darby's strategy is going to be, and I don't think there is any strategy at all in today's announcement.
Darby was previously the chief executive of Vodafone UK and the International business, which was responsible for the United States, Africa, India and China.
(Editing by Will Waterman)