Pre-tax profits fall 8% at Hull telecoms firm

Hull-based Kcom Group saw its pre-tax profits and revenue both reduce by 8% for the first first months of its financial year.

Profit before tax reduced by 8% to £13.6m, down from £17.7m for the same period in the previous year. Its group revenue also reduced by 8%, from £165m last year to £151m – which it said was driven by expected decline in its legacy activities within National Network Services. 

However, the telecoms firms said that its Hull & East Yorkshire revenue increased by 1% compared to first half last year and that there had been growth in each of its core channels, including 4% revenue growth in consumer.

It said that further growth had been impacted by the UK General election and proposed exit of a previously identified software contract. 

The company said the impact of the previously identified software contracts in enterprise resulted in incurred losses of £1.7m and provisions of £4.5m.

Kcom said it was on track to make fibre available to the final 25% of premises in Hull & East Yorkshire addressable market by March 2019. Its net debt stands at £67.8m, driven predominantly by continued capital investment. 

Bill Halbert, chief executive, said: “In the context of today’s economic and political uncertainties, our results demonstrate encouraging progress. Our headline performance was offset by the expected decline in the legacy activities in National Network Services and ongoing issues with previously identified software development contracts within Enterprise.

“In Hull & East Yorkshire, we achieved particularly strong growth in the residential market. The take-up of fibre services across our broadband base has remained robust at 44%. Building on the success of the current fibre investment, we are pleased to announce plans to complete the final stage of this deployment, making fibre available to all premises within our addressable market by March 2019.

“In Enterprise, despite performance having been affected in the first half by the slowdown in government spending caused by the General Election and by continuing issues with the previously identified software development contracts, there was underlying growth alongside new contract wins and renewals.”