KCOM eyes growth opportunities after flat year

6th Jun 2014 07:11

- Revenues and profits broadly flat- Cash flow strong, net debt reduced- Company looking for investment opportunitiesCommunication services group KCOM said it met expectations with its annual results despite a subdued performance in the year ended March 31st.However, the company said that after a recent re-financing and with underlying cash flow strong, it is looking for investment opportunities, both organically and inorganically, to strengthen its position in target markets.Revenues totalled £370.7m in the last fiscal year, down 0.6% on the year before.The KC division, which provides communications services to consumers and businesses in Hull and East Yorkshire, reported revenue of £105m, just 0.3% ahead of the previous year. This was due to a strong consumer performance, particularly in the take-up of fibre services, partly offset by lower business sales.Meanwhile, the larger KCOM segment, which serves multi-site enterprise and public sector organisations across the UK, saw revenues fall 0.9% to £270.9m, "reflecting our focus on exploiting emerging market trends", the company said.Reported pre-tax profit grew 5.9% to £50.5m, but adjusted profits from continuing operations declined by 0.2% to £49.9m."This set of results reflects the progress in key strategic areas being made across the group, underpinned by the highly cash generative nature of the business," said Chief Executive Bill Halbert.Net cash inflow from operations surged by 41.6% to £71.2m, while net debt was reduced by 15% to £75m.The company proposed a final dividend of 3.25p per share, taking the full-year payout to 4.88p, up 10% year-on-year.Looking ahead, the company said: "As we focus on the delivery of value added services to the enterprise market, we expect to see a continued decline in some traditional carrier revenue. [...] we will now consider opportunities for investment in those focus areas going forward."BC