Kingston Communications is repositioning itself to flourish in the convergence market, according to chief executive Malcolm Fallen.
The head of the telco told CRN that the group has moved away from traditional legacy services into total convergence offerings.
His comments come in the wake of Kingston’s 2006 financial results, which saw a 30.3 per cent annual rise in turnover from £348.4m to £453.9m.
“The results demonstrate the successful repositioning of the group, and this is continuing on course,” Fallen said. “We have reflected on the chan-ging needs of customers from legacy systems into convergence.”
Fallen said the potential take-over talks surrounding Kingston (CRN, 6 March) had no effect on the group’s results, because its focus on converged products and services has seen annual organic growth of five per cent.
Kingston’s VAR arm Affiniti also had a strong year, with turnover rising by 42.6 per cent from £232.9m in 2005 to £332m this year.
“Affiniti continues to do well in providing converged IP services to our target market,” Fallen said. “It will continue to grow next year.”
However, Kingston still posted losses of £80.8m, compared with £8m profit last year. Fallen said this figure is a result of Kingston accelerating the write-off of some of its dated systems.
“We started this transformation journey two years ago, and customers will continue to change as technology evolves,” Fallen added.
Matthew Pearson, telecoms analyst at investment bank Investec Securities, said: “Kingston has changed its strategy over the past 18 months. It has done the right thing by diversifying its portfolio away from commoditised voice. The Kingston results are in line with expectations.”
Pearson added the industry is moving away from the legacy world into combined voice and data, with a focus on voice over IP.
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