Kingston Communications is an established UK communications company. The Group's national business-to-business capabilities encompass the provision of fully integrated and managed network solutions, complemented by the delivery of voice, data and call handling services in the towns and cities served by the Kingston Communications network. This infrastructure comprises twenty-five metropolitan fibre networks and a long distance broadband network, which was initiated for service in May 2001. Kingston's new media activities include the DSL-based interactive television service, KIT, and satellite broadband content, storage and distribution arm, Kingston inmedia. The Group's East Yorkshire network operation has served business and residential customers since 1904.

Peel Hunt Buy 97.25 150.00 150.00 Reiterates

finnCap Corporate 97.25 130.00 120.00 Reiterates

Hi Skinny,

I think a full turnaround will take another couple of years as they are connecting fibre broadband at a fast rate and whilst doing so are obviously burning cash and only just starting to see returns on that cash.

By end 2019 most of the KCOM area will be connected and outgoings reduced at the same time income increasing.

With a continuing dividend that easily beats any bank or similar interest rate, I am still staying with them as a fairly safe bet.

Peel Hunt Buy 99.75 150.00 150.00 Reiterates

Consistent! Peel Hunt Buy 90.70 150.00 150.00 Reiterates

Trading Update and Management Change

KCOM Group PLC (KCOM.L) (the "Group") issues the following update on trading ahead of the Capital Markets Day it will host on Thursday, 1 February.

The Group remains on track to deliver an overall EBITDA performance that is slightly ahead of the Board's expectation, and a revenue performance slightly behind, for the financial year ending 31 March 2018.

Hull and East Yorkshire continues to enjoy a successful year, with revenue tracking in line with the Board's expectations. EBITDA for the period will benefit from a multi-year rebate on hereditament (rateable value) relating to the Hull and East Yorkshire network infrastructure. In December, we achieved our target of making fibre available to 150,000 premises. We have now started the second wave of our fibre deployment to make it available to the remaining premises in our addressable market. Fibre take up remains strong and we expect by the end of February to reach a point where more of our broadband customers are taking the service on fibre than on copper ADSL.

The Group also announces today that Gary Young, the Executive Vice President responsible for Hull and East Yorkshire, is leaving the Group to pursue another opportunity. A process to find his successor is underway and Mr Young will remain with the business whilst an orderly handover of his responsibilities takes place. The Board wishes to thank Gary for his significant contribution over his years with the Group and particularly the past 6 years leading the Hull & East Yorkshire business.

In Enterprise, our contract with NFUM has been renewed and extended to include the provision of additional cloud services. In December, we were selected by a large automotive manufacturer to develop a platform solution using our Cloud Native skills. Also in December, we signed a 12 month extension to our contract with HMRC, taking this contract through to 2020. As recently reported by the Public Accounts Committee, HMRC is re-phasing the timeline for its internal transformation programme and we expect this re-phasing to have a negative impact on project-based revenue for Enterprise in the final quarter of this financial year. This, together with delays to the finalisation of certain contracts, is expected to have a flattening effect on revenue and consequently reduce EBITDA performance in Enterprise for the full year compared to last year. We do not expect these factors to affect the long term growth prospects of the segment.

National Network Services has continued to perform in line with the Board's expectations and we maintain our view that revenue and EBITDA will begin to stabilise going into next year.

Bill Halbert, Chief Executive said:

"We continue to execute against our strategy, bringing fibre to the final corners of Hull and East Yorkshire, refining our propositions in Enterprise and winning the trust of new and existing customers, and managing National Network Services for value. I would like personally to thank Gary Young for his significant contribution to our Group. I've worked closely with Gary over the past 6 years, a period in which he has led successfully our Hull and East Yorkshire business and overseen our successful deployment of fibre broadband. All of us at KCOM wish him every success in his new role."

The Group expects to announce its preliminary results for the year ending 31 March 2018 on 5 June 2018.

A 50/50 report but it is looking like positives are starting to gain over negatives. I feel by this time next year, the trading figures will be a fair bit better, with more monies coming in from the expanding fibre structure with outgoings being stable.

Peel Hunt Buy 89.75 150.00 150.00 Reiterates

finnCap Corporate 89.75 120.00 120.00 Reiterates

Hi Skinny,

Agree re the yawn as Peel Hunt have been reiterating this for several years now.

Looks like the Capital Markets Day may be going well.

Swines!

Numis Reduce 96.10 - 85.00 Initiates/Starts

Peel Hunt Buy 91.71 150.00 Reiterates

27 November 2018 Interims results

Peel Hunt Buy 92.67 150.00 Reiterates


Interim Results 27th November.

Trading Update and Revised Dividend Commitment

The Board of KCOM Group PLC (KCOM.L) today issues the following announcement regarding the Group's trading outlook for FY 2019 and FY 2020 and its dividend commitment for the current financial year.

Trading Performance

The Board now believes that the Group's trading performance for the current financial year ending 31 March 2019, on a pre-IFRS 15 basis, will be weaker than originally expected. This is principally the result of flat revenue (driven by lower than expected order intake) in the Group's Enterprise segment and continued customer churn in the Group's National Network Services segment ("NNS"). It is the Board's view that these trends will continue into the following financial year.

The performance of the Group's NNS segment has resulted in the Board's decision to impair the carrying value of goodwill in NNS. A non-cash exceptional item of £32.2 million will be recognised in the Group's upcoming interim results.

The Group's Hull & East Yorkshire segment, which is the largest contributor to Group EBITDA, continues to perform well and in line with market expectations. This good performance is expected to continue during the second half of the financial year, supported in part by the anticipated December launch of a new unlimited fibre broadband portfolio for consumer customers.

As a result, the Board now expects EBITDA (pre-IFRS 15) for the current financial year ending 31 March 2019 to be c.5% below current market expectations. However, as a result of the factors outlined above, it is also the Board's expectation that EBITDA (pre-IFRS 15) for the financial year ending 31 March 2020 will be significantly below current market expectations.

Cashflow, Balance Sheet and Dividend

The Group's net debt at 30 September 2018 is £108.5 million (30 September 2017: £67.8 million, 31 March 2018: £62.6 million). This includes a material permanent one-off working capital outflow, which is principally the cash impact of the decision, in order to drive down costs, to insource a managed service arrangement with a key partner, alongside the unwind of certain deferred revenue balances in the Group's Enterprise segment. The Board expects the Group's net debt at 31 March 2019 to be c.10% higher than current market expectations.

Taking these changes to the Group's medium-term trading performance, cash flow and balance sheet into account, the Board now considers it inappropriate to commit to continuing to pay an uncovered dividend. As such, the Board has decided to review the Group's ongoing dividend policy, resolving to pay a dividend of not less than 3 pence per share for the current financial year ending 31 March 2019, rather than the previously stated commitment to pay 6 pence per share.

The Group will announce interim results for the six months ending 30 September 2018 on Tuesday, 27 November 2018.

Half-year Report

KCOM Group PLC (KCOM.L) announces its unaudited interim results for the six months ended 30 September 2018.

Summary

· Group revenue1 declined by 5%

· Group EBITDA1 up by 2%

· Hull & East Yorkshire continues to perform well and in line with market expectations

― Full-fibre deployment remains on target to be available to 100% of addressable market by March 2019

― Percentage of broadband customers taking full-fibre continues to increase

· Poor performance in national business segments driven by:

― Revenue decline in NNS, due to continuing churn

― Broadly flat revenue in Enterprise reflecting disappointing order intake performance

· NNS performance results in non-cash exceptional impairment of goodwill of £32.2 million

· Increase in net debt to £108.5 million (1.6x net debt: EBITDA), driven by:

― Capital investment in Hull & East Yorkshire segment

― Material working capital outflow, due to insourcing a managed service arrangement and unwind of deferred revenue balances in Enterprise

· Interim dividend of 1.00p (2017: 2.00p), reflecting Board's previously announced decision to revise full year dividend commitment to a minimum of 3.00p per share

Graham Sutherland, Chief Executive Officer said, "Despite only joining the business last month, I believe KCOM has considerable skills, assets and capabilities. The full fibre rollout in Hull and East Yorkshire leads the market, provides us with sustainable cash flows and enables the further development of our service offering. However, the current financial performance of our two national businesses is below our expectations, in particular, in National Network Services where we are experiencing high levels of customer churn. In the second half of the year, we will focus on three key priorities - review of our business strategy to identify how we create the best value from KCOM's assets, implementing initiatives to improve business performance and improving transparency through clear metrics on which our progress can be measured. We will be in a position to share outputs from the strategic review in March."


Outlook

The strong performance in Hull & East Yorkshire is expected to continue during the second half of the year, supported in part by the launch in early December of a new unlimited fibre broadband portfolio for consumer customers.

While we have started to take action to address some of the issues in our national segments, we anticipate that the trading performance in Enterprise and National Network Services will remain challenging during the second half of the year and that this will continue into next year. As a business, we are seeking to address these medium-term challenges by reducing cost and complexity at the same time as identifying those opportunities to deliver value from KCOM's assets. The Board believes that the Group has the potential to execute well on those opportunities.

The Board previously announced its intention to recommend a minimum full year dividend of 3.00p per share for the current year.


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