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Annual Results

KCOM operating profits fall

27 May 2016 07:46

KCOM Group's operating profits fell to GBP50.9m in the year to the end of March - 11% down onlast time.

Revenues were up 0.3% at GBP349.2m and EBITDA rose by 0.8% to GBP74.9m but pre-tax profits of GBP47.9m were down 7%.

The final dividend is up 10.1% at 3.94p per share taking the total fo 5.91p from 5.37p last time.

Chief executive Bill Halbert said: "We have made important progress with our strategic objectives in the current year, including the consolidation of our activities under a single brand, KCOM. "In Hull and East Yorkshire, we continued our fibre to the premises deployment, reaching 78,000 premises by 31 March 2016 and committing to reach 150,000 premises by December 2017. Level of take-up remains high with 26,000 premises connected by March 2016. We had a very successful year with our enterprise customers, developing our existing relationships as well as securing new contracts; of particular note are BUPA, ATOC and Shoosmiths (preferred supplier). The disposal of our national network assets has strengthened our balance sheet and advanced very substantially our options for longer term transformation.

"The combination of the strength of our balance sheet and the progress we have made this year will see us accelerate investment over the course of the next few years. Alongside acceleration of our fibre programme, we will invest in new services and capabilities, in particular to support our enterprise customers.

"We see greatest opportunity for further material shareholder value creation being derived from the successful continued development of our enterprise customers and our Hull and East Yorkshire consumer and small business customers. Our increased investment in, and focus on, those areas will in turn will lead to an accelerated decline in revenue in the SMB area over time.

"In accordance with our previously stated dividend commitment, the Board is recommending a final dividend of 3.94 pence per share, giving a full year dividend of 5.91 pence per share; representing a growth in full year dividends of at least 10% for each of the past six years."

KCOM also announced that chief financial officer Paul Simpson will be leaving the business later this year. The group said he recently led the successful sale of the national network infrastructure and played an integral part in transforming the company over recent years.

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