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Half-year numbers out for provider Kcom - sales and profits slip

Internet Security Threat Report 2014

KCom Group recorded a first-half year profit slide on the back of infrastructure and fibre optic investments with a downturn in business broadband and large enterprise integration work not helping.

Despite the slight stumble for the six months to 30 September, the LSE-listed telco – which provides comms to private and public sector customers across Blighty – said it expects to meet full year estimates.

Revenues came in at £185.5m, down 1.7 per cent on the same period a year ago, as profit before tax declined 5.4 per cent to £24.7m.

The KC brand, which operates telephony and broadband services via the East Yorkshire network, went backwards, albeit by some £300k, to £53.27m. Rising consumer and contact centres biz offset a reduction in commercial sales and publishing services.

The business comms and integration activities at Kcom went backwards too, down to £134.65m from £137.5m a year ago. This unit trades as Smart 421, Eclipse and Kcom and targets large enterprises, SME and public sector users.

Contracts wins and renewals in this part of the company included BA, Sports Direct, Red Hat, the Borough of Poole and the Health Lottery.

The Public Company segment of the group accounted for £2.4m of inter-company trading and as such was discounted from the combined revenues of KC and Kcom.

Non-exec chairman Bill Halbert, who kickstarted the transformation of the group in 2008, revealed he is to split the chairman and CEO roles, assuming the role of group chief exec from April Fool's Day next year.

In turn, non-exec director Graham Holden will become non-exec chairman, while executive director Kevin Walsh, who looked after the KC brand, will retire from next summer.

Halbert said the business was still investing in core "infrastructure and fibre optic deployment" which "contributes to a short-term decline in certain financial metrics".

KCom warned that "certain regulatory changes", which include the "wholesale narrowband market review, may reduce future revenue from those activities by up to £5m". ®

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