Lower operating costs boost KCOM pre-tax profit

25 May 2010

UK-based telecoms provider KCOM Group has released its financial results for the twelve months ended 31 March 2010, revealing a 64% year-on-year increase in pre-tax profit on the back of reduced operating expenses. The telco posted a pre-tax profit of GBP29.4 million (USD42.4 million), up from GBP17.9 million in 2008/09, while earnings before interest, tax, depreciation and amortisation (EBITDA) also rose to GBP69.8 million, again reflecting lower operating costs across the group. Following a company-wide focus on cost reduction as part of strategic review conducted in November 2008, operating expenses and finance costs fell 32.4% and 38.8% respectively against the same period a year earlier, to GBP386.3 million and GBP7.4 million, although revenue was also down 12.6% at GBP412.8 million; KCOM said that it had expected the revenue decline in line with its decision to discontinue offering a number of low-margin services. Commenting on the results, Bill Halbert, KCOM Group Executive Chairman, said: ‘KCOM Group has made excellent progress since our November 2008 strategic review in improving the quality of our business activities and the underlying financial strength of the Group. Today we are announcing a strong set of results, showing marked increases in profitability and cash generation and a substantial reduction in our overall debt. This has been achieved through a number of successful financial measures, our increased focus on profitable customer relationships and actions to exit low margin commoditised revenue streams. We have restructured and refocused our various activities and underpinned them with market leading partnerships.’

United Kingdom, KCOM