UPDATE: KCOM To Make GBP21M Pension Repayments Over 3 Years

16th Jul 2010 10:01

(Adds comment) By Tommy Stubbington Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. telecommunications provider KCOM Group PLC (KCOM.LN) said Friday it has agreed to make pension deficit repayments worth GBP21 million over the next three years, following a deal with pension trustees aiming to provide certainty with regard to its pension funding position. The company, which also announced its trading is in line with company expectations for the three months to June 30, will close its two defined benefit pension schemes to new members from Oct. 1, and provide a single defined contribution scheme for all employees. KCOM will pay GBP9.2 million of the repayments in its current fiscal ending 31 March 2011, with the remainder spread evenly across the following two years. "While it does have an impact on earnings", the repayment agreement is "a good result," Executive Chairman Bill Halbert told Dow Jones Newswires. Most analysts, he said, had expected a figure of around GBP30 million in repayments over the three years. The tri-annual valuation of the company's pension scheme deficit is currently underway, with the outcome expected towards the end of 2010, Halbert said. The company's IAS deficit at March 31 stood at GBP50.4 million. The company said it is on track to return to growth in the current fiscal year. Economic uncertainty and cautious corporate and public spending has hampered efforts to win new customers, Halbert said. However, the company has had greater success in extending the range of products it sells to existing customers, and will shortly be announcing significant contract renewals, he added. Shares at 0900 GMT were flat at 45 pence in a slightly higher DJ U.K. Smaller companies index, up 0.2%. -By Tommy Stubbington, Dow Jones Newswires; 44-20-7842-9268; [email protected] (END) Dow Jones Newswires July 16, 2010 05:01 ET (09:01 GMT)