Broker snap: finnCap ups target for KCOM

2nd Apr 2012 12:27

Following KCOM's trading update this morning, finnCap has raised its target price for the telecoms group from 100p to 110p and reiterated its buy rating."FY trading update is in line with expectations, indicating sustained growth in broadband penetration in East Yorkshire, and continued development of recurring revenues in the national Kcom division, underpinned by the leadership position in the emerging Public Services Network market. New enterprise contact wins for a range of services across all brands provides further momentum," said analyst Andrew Darley.The broker's earnings before interest, tax, depreciation and amortisation forecast has been lifted on the back of improved expected margin performance. "Growth across the sector is a challenge, but margin improvement is evident and KCOM rewards investment with visible dividend growth and the possibility of medium term outperformance," Darley said.BC