Trading at Smart421 owner KCOM on track to meet expectations

The Felaw Maltings office complex in, Ipswich, the home of KCOM company Smart421.

The Felaw Maltings office complex in, Ipswich, the home of KCOM company Smart421. - Credit: Archant

Communications company KCOM, the parent group of Ipswich-based systems specialist Smart421, said today that trading remained in line with market expectations.

In a pre-close statement ahead of its annual results for the year to March 31, KCOM added that it was accelerting the deployment of fibre-based broadand in its home territory of eastern Yorkshire,

It said its KC business – formerly known as Kingston Communications, out of which the KCOM group developed – had achieved take up of fibre-based broadband services of more than 30%, well ahead of the national average.

“As a consequence, the board has approved plans to accelerate the speed of deployment, making it available to a further 60,000 homes and businesses over the next two years,” it added. “By March 2017, over 100,000 properties will be able to access the service.”

At the half-year stage, KCOM reported a 6.7% dip in revenue to £173.004million with bottom-line pre-tax profits 8.4% down at £23.623m. However, it continued to make progress on an underlying level, with profit from continuing operations before tax and exceptional items rising by 2.8% to £25.4m.

Revenues at KC increased from £46.7m to £47.1m and earnings from £26.4m to £26.8m, helped by growing demand for broadband services and increased penetration for bundled products.

However, this was offset by pressure on revenues and earnings within KC’s associated contact centres and publishing businesses, resulting in overall revenues for the KC segment dipping to £52.5m and earnings to £27.7m.

Most Read

The group’s Kcom segment, which covers its national business and public sector activities, including Smart421 which is based at Felaw Maltings in Ipswich, saw revenue fall to £123.1m and earnings to £12.0m.

Smart421’s performance was inline with the segment as a whole, with revenue falling from £14.8m to £12.8m and earnings from £1.6m to £1.4m, but KCOM said at the time that the business had made “clear strategic progress, particularly in the delivery of cloud-based integration services”.

It added: “The revenue decline is solely attributable to a reduction in consulting revenue with one financial services customer. Activity to rebuild the pipeline and order book is progressing well. Overall profit margins remain consistent and we remain confident the brand will continue to grow in future periods.”

KCOM is due to announce its annual results on June 5. It has already committed itselt to increasing its full-year dividend by 10% a year through to March 2016.