Kcom puts Fujitsu's Long in the MD hot seat

New MD has work cut out as firm reports dip in half-year numbers


Comms and networks integrator Kcom has confirmed that Fujitsu UK director Stephen Long is preparing to take the vacant MD's chair.

Group CFO Paul Simpson stood in as interim MD following the departure of previous incumbent Paul Renucci nearly two years ago but will return to his day-to-day activities.

"Stephen Long will join as managing director of Kcom in January to execute our plan for growth" said Kcom in a statement to the LSE. "Stephen joins the group from Fujitsu where he had responsibility for its UK public sector division."

The appointment was named as Kcom rolled out half-year numbers to 30 September, with turnover down 4.7 per cent to £188.7m and EBITDA falling 3.9 per cent to £39.1m.

Net debt climbed more than 25 per cent to £94.3m - though well within the 1.5 EBITDA ratio, a metric used by credit agencies to determine how easily an organisation can pay off its debts.

Kcom said the upward swing in borrowing - after seven consecutive quarters of falls - was related to working capital outflow due to the purchase of £10.9m worth of shares and a rise in capital expenditure, though the company did not specify the nature of this cost.

The KC division operates telephony and broadband in its East Yorkshire network. Sales in this unit went up 1 per cent year-on-year to £53.6m and contributed EDITDA of £27.8m, up £200,000.

The Kcom unit and brand, which covers the national business comms activities, reported a revenue dip of 6.9 per cent to £137.5m and a fall in EBITDA from £16.1m to £14.5m.

However, finance costs actually fell to £2.2m from £3.74m "reflecting revised hedging" that that came into effect from January, coupled with lower depreciation", the firm said.

Kcom said: "That revenue decline has been driven by a number of specific areas … in particular a £7.7m year-over-year reduction in revenue associated with a specific one-off network build contract".

"While the current economic uncertainty is having an impact on the speed and level of investment decisions being taken, particularly in the enterprise market, we remain focused on pursuing only those opportunities that offers one term recurring revenues, at acceptable margins," it added.

The firm said it expects the "macro-economic uncertainty to continue to slow decisions on new investments across our markets" but added that group strength and cash generation capacity bode well for the future. ®

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