Profits drop by two-thirds as telecoms business restructures

The restructuring of telecoms business KCOM has hit its financial performance, with “a further decline” in revenues and margins forecast.

At the end of 2015, KCOM sold off all of its national network infrastructure outside its East Yorkshire base to CityFibre for £90m.

The results it has announced today, for the year to March, of a 66% fall in pre-tax profits, to £30.5m, and a 5% drop in revenues to £331.3m were “in line with expectations”.

It attributed the reductions to the “continuing decline in legacy business” and additional costs related to its national fibre network.

The company’s directors remain “confident in the transition of KCOM” which plans to become a regional fibre-based services provider and a provider of complex IP solutions to the enterprise market.

In a statement to the stock market, KCOM said: “We remain focused on creating a simplified business, with a cost base better aligned to the growth opportunities in our core markets that the Board believes will generate long-term sustainable returns and growth for shareholders.

“Whilst we expect to make further progress in both Hull & East Yorkshire and Enterprise, as we transition away from commoditised services, we expect there to be a further decline in revenues and margins associated with our legacy activities.”