KCOM hints at 'significant' government contract win

Comms firm reveals it is in box seat for big public sector cloud deal as it unveils solid financial results

KCOM Group revealed it has scooped preferred supplier status on a "substantial" government contract as it posted first-half numbers in line with expectations.

The London-listed outfit, which provides business communications services through its Kcom arm and also owns Yorkshire ISP KC, saw total revenue for the six months to 30 September dip two per cent year on year to £185.5m.

The firm was unfazed by a five per cent slide in pre-tax profit, before exceptional items, to £24.7m, saying a fall in the bottom line was inevitable in the wake of its recent investment in branding and infrastructure.

KCOM tantalised the market by revealing it has bagged preferred supplier status for a "significant" hosted contact centre deal with a government department, without revealing further details.

"During the second half of the year, we will be finalising contract details for these services, which are enabled by our cloud-based portfolio, Workplaces," the firm teased.

Kcom saw revenue fall from £137.5m to £134.7m year on year, despite double-digit growth at its Smart421 and Eclipse sub-brands, while EBITDA fell fractionally to £13.9m.

Meanwhile, KC's revenue was virtually flat at £53.3m, with EBITDA also holding firm on £28.1m.

KCom executive chairman Bill Halbert, who will become chief executive next April as the chairman and CEO posts are split in two, described the results as "encouraging".

"We continue to invest in support of the competitive position of our brands, our core IT applications and infrastructure and our broadband fibre deployment," he said.

"While, as expected, this contributes to a short-term decline in certain financial metrics, our strategy and plans continue to yield positive results."