KCOM Group Targets Debt and Reduces Workforce

In a statement issued today North East comms company KCOM said that Group financial performance for the nine months ended 31 December 2008 has benefited from a continuing improvement in the performance of its Telecoms & Internet Services business (T&IS).

That improvement has contributed to a year over year increase before exceptional items in both Group operating profit and profit before taxation, in the nine month period.

The company goes on to add, “The current trading environment remains challenging for the Integration and Managed Services (I&MS) business, which has seen revenue decline year on year by 10 per cent.

In the light of the ongoing economic uncertainty, and its effect in particular on the I&MS business, the Group is undertaking a further headcount reduction of 150 employees within I&MS.

That reduction, in addition to reducing the overall cost base, is a key component in the transformation of I&MS that will see its focus shift to higher margin and recurring services. As a result, I&MS is expected to return to overall net profitability, before exceptional items, during the final quarter of the financial year.

Following the peak net debt reported in September 2008, we also anticipate a reduction in Group net debt as at 31 March 2009.The Group has a solid financial base with a committed bank facility in place until 2012.

In spite of the current economic climate and exceptional items associated with the transformation process, the Board believes the Group will end the financial year in a stronger position to deal with the current challenging trading conditions.”

KCOM announces its preliminary results on 2 June 2009.

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