Margin squeeze at Affiniti

Telecoms group KCom admits margins at its integration and managed services arms are at the lower end of management expectations

Voice and data integrator Affiniti’s trading performance is currently at the lower end of previously set targets, parent Kcom has admitted.

In an interim management statement for the three months to 31 December, the telecoms group admitted its ‘integration and managed services businesses’ are anticipated to deliver results at the lower range of expectations. This encompasses Affiniti and two smaller units.

Management had previously targeted an EBITDA (earnings before interest, tax, depreciation and amortisation) margin range of between 3 and 5 per cent for this part of its business.

Kcom confirmed that overall group trading remains within the range of its expectations.

“Based on the developments both in business focus and cost management implemented this year, our target EBITDA margins of 5-8 per cent in 2008/2009 and 7-10 per cent in 2009/10 remain achievable,” the firm said in a statement.

It added that its telecoms and internet businesses continues to trade well.