SHARES in Cable & Wireless Communications fell almost 10 per cent yesterday after the telecommunications provider said dwindling tourist numbers in the Caribbean had hit pre-tax profits.

Interim revenues were also lower than the city’s expectations and some analysts retained their “sell” recommendations for C&W Communications, which became an independent company in March following a demerger of Cable & Wireless.

Tony Rice, C&W Communications chief executive, said the company’s full year expectations were unchanged, but that the outlook was mixed for its various divisions.

“The market situation varies from region to region and our first half performance demonstrates the defensive and cash generative qualities of the group,” he said.

Mr Rice said the Macao business had been boosted by a 20 per cent increase in visitors attracted by the casinos in the former Portuguese colony. Mr Rice said that there was not much respite for the economy in the Caribbean, C&W Communications’ biggest market. “We do not expect an economic recovery there during this fiscal year,” he said.

The company’s newly-launched pay TV services in Panama and Monaco “complemented our other service offerings, although it is too early to expect much of a contribution this year”.

For the six months to September 30, revenues increased from $1.13 billion to $1.16 billion, but pre-tax profits fell 4 per cent to $210 million.

Earnings per share fell from 3.7 cents to 3.3 cents and the proposed dividend is 2.67 cents. C&W Communications confirmed its intention to hold the full year pay-out at 8 cents.

C&W Communications operates consumer telecoms businesses in 38 countries. As well as operating data centres and hosting facilities, C&W Communications provides services to 8.3 million mobile, 600,000 broadband and 1.8 million fixed line customers.

The company was created in March when Cable & Wireless demerged to create C&W Communications and C&W Worldwide, which services corporate and public sector customers rather than consumers.

Some analysts were not impressed with the results, including Evolution, which retained its “sell” recommendation.

“The Panamanian business was particularly disappointing, reporting a 4 per cent revenue miss and 7 per cent EBITDA miss,” it said. “Most damningly, C&W Communications generated just $16 million of cash flow in the period compared with our $59 million forecast.”

Mark James, an analyst at Liberium, said the results “don’t make pretty reading” and added that the decline in figures from the Panama and Caribbean businesses was of concern.

“We remain of the view that problems in these businesses are structural (ie: competition) and that those hoping for cyclical recovery will be disappointed,” he said.

At C&W Communications’ annual meeting in July, the board received a rebuke from investors on executive pay.

More than a fifth of votes went against the remuneration report, which included plans to raise the salary of chief executive Tony Rice by 17 per cent to $1.1 million (£726,000) in 2010-11.

The vote revealed that a substantial minority of shareholders remained unhappy with the company’s remuneration practices. A controversial incentive plan paid out £32 million to senior managers of the combined business last year.

Cable & Wireless Communications’ remuneration committee argued that the new package takes Mr Rice’s pay to a competitive market rate but the Association of British Insurers raised concerns over remuneration practices.

On Thursday shares in C&W Communications fell 4.97p, or 9.2 per cent, to 49.08p.