Communications and systems integration group KCOM, which includes Ipswich-based Smart421, said today it had performed “in line with expectations” during the first half of its current financial year.

In a pre-close trading statement ahead of interim results for the six months to September 30, due out on November 25, KCOM said strong cash generation would enable it to continue with its “progressive” dividend policy.

The statement said: “During the first half year of the financial year, the group has performed in line with expectations, with continued strong cash generation.

“As part of its investment in super-fast, fibre-based broadband in Hull and East Yorkshire, the group has recently secured its 10,000th ‘Lightstream’ customer. The group continues to progress its strategy of focusing on key target markets and will give a further update on its fibre deployment and other initiatives at the interim results.

“The cash generative capacity of the group means it is able to continue with its progressive dividend policy while investing in those areas that support the Group’s ambition to achieve leadership positions in all its target markets.”

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In June this year, KCOM reported a 0.6% fall in group-wide revenues for the year to March 31 to £370.7million, against £372.9m the previous year, for which figures were been restated in line with changed accounting standards.

Turnover within the group’s Kcom segment, covering its value-added communication and IT businesses, including systems integration specialist Smart421, dipped to £270.9m, compared with £273.5m the previous year, while revenues from KC, the group’s original telecoms-based business in east Yorkshire, edged ahead, from £104.6m to £105m.

Headline earnings followed a similar trend, with those at Kcom easing from £29.4m to £28.7m while the KC figure rose from £54.5m to £56.2m, leaving the group figure, after central costs, 0.5% ahead at £75.3m against £74.9m.

After exceptional items ? including reduced restructuring costs compared with the previous year and a credit following the termination of a regional goverment contract ? group earnings were 4.6% ahead at £75.9m against £72.6m.

Pre-tax profit before exceptionals was 0.2% lower, at £49.9m against £50m, but the bottom line figure was 5.9% up, at £50.5m against £47.7m.

A proposed final dividend of 3.25p per share will make a total for the year of 4.88p per share, in line with the board’s commitment to increase the dividend by 10% a year until March 2016.