Communications and technology group KCOM today posted annual results “in line with expectations”, with underlying pre-tax profits edging ahead despite a dip in revenues.

KCOM, parent company to Ipswich-based systems integration specialist Smart421, reported a profit from continuing businesses before tax and exceptional items of £52.7million for the year to March 31, up 3.1 from £51.1m the previous year, on revenues of £372.9m, down 3.7% from £387.3m.

The bottom line pre-tax total of £50.4m was 1.4% down from £51.1m the previous year, with the fall largely reflecting one-off restructuring costs.

KCOM said its KC division, covering its telephony and broadband business in East Yorkshire (based on the original Kingston Communications company from which the group developed) achieved 0.9% increase in revenue to £104.6m, reflecting continued demand for bundled services in the consumer sector.

This growth, combined with lower operating costs, resulted in a 2.4% increase in earnings before depreciation and finance costs to £54.5million.

The Kcom division, covering the group’s national operations, including its Kcom business-to-business telecoms business, broadband provider Elipse and Smart421, saw revenue fall by 5.5% to £273.4m and earnings by 5.2% to £29.4m.

KCOM said most of the difference was accounted for by a major one-off network build contract for Kcom, worth £11.7m, during the previous year, although market conditions were also “challenging”.

However, Kcom had secured a number of new customers, including supermarkets group Morrisons, to support its entry into the convenience store sector, and mobile phone retailer Phones4U, and Smart421 and Eclipse had continued their progress with order book growth of 17% and 39% respectively.

“We continue to build relationships with our key partners, with, for example, Amazon Web Services being increasingly recognised as a key part of Smart421’s to to market strategy,” the group added.

Executive chairman Bill Halbert said: “The group has made further progress in improving the quality and long term sustainability of the business.

“This is evidenced by the continued strong performance in KC and some of the key customer wins during the year, as a result of the strengthening of our competitive position in target markets.

“Our disciplined financial management gives the group a positive outlook,” he added.

KCOM’s final dividend will rise by 11.2% to 2.97p per share, making a total for the year of 4.4p per share, an increase of 10%.