KCom dials in to profits growth

COMMUNICATIONS services group KCom has grown annual pre-tax profits by almost 25% and today said its future prospects were encouraging.

Revenues at the Hull-based group dipped by 2% to £387.3m for the year to March 31. Pre-tax profits rose to £51.1m, however, with operating profit also up by 18.9% to £57.8m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) improved by 2.5% to £77.9m.

Chairman Bill Halbert said: “The group continues to perform well, making good progress against its longer term objectives. We remain focused on executing our growth strategy and we expect the performance of the group to continue to reflect this during the current financial year.

“The strength in earnings and associated strong conversion into cash emphasises the quality of the service we provide and forms a stable foundation for increasing shareholder returns and the pursuit of growth.”

KCom is recommending a final dividend of 2.67p per share, giving a full year dividend of 4p per share.

“We reiterate also our commitment to a minimum 10% dividend growth in the coming year, reflecting the Board’s confidence in future financial performance,” added Mr Halbert, who is to continue as chairman following consultation with the group’s largest shareholders.

KCom said the dip in revenues was a result of the decline in low margin, non-core activities.

It said its KC telephony and broadband arm, which covers East Yorkshire, had reported increased revenues, however, its national Kcom arm had seen revenues dip.

It added that it expected performance to continue in line with market expectations over the rest of this financial year.