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Kcom reports double-digit revenue fall

Prestige wins such as HMRC not enough to prevent first-half turnover tumble for comms provider

Kcom’s revenues fell by double digits in its fiscal first half as the comms provider struggled to haul in new business.

The Cisco Gold partner’s sales for the period to 30 September fell by 11 per cent to £95.6m year on year, according to London-listed parent KCOM Group’s unaudited interim results statement.

KCOM Group chief executive Bill Halbert said Kcom’s progress with key customers such as HMRC was not enough to compensate for the higher than anticipated decline in other activities, as referenced by Kcom managing director Stephen Long in a recent interview with CRN.

“We have implemented a plan to reduce costs and will take further action to accelerate progress to reposition the overall Kcom brand performance,” Halbert said.

KCOM Group’s total revenue for the period fell by 6.7 per cent to £173m as its Hull telecoms business KC put in a “strong” performance, with revenues rising fractionally to £47.1m.

Group pre-tax profit fell 8.5 per cent to £23.6m, with EBITDA declining 3.5 per cent to £36.1m.

The EBITDA contribution of Kcom fell from £8.5m to £7.4m year on year.

However, KCOM Group talked up the progress of Smart421 and Eclipse, two brands that sit outside the Kcom brand but within the wider Kcom segment. Smart421’s revenues fell from £14.8m to £12.8m year on year but the cloud specialist’s order book is “progressing well”, the firm said, while ISP Eclipse’s revenues rose from £12.7m to £14.7m.

“The Group continues to make progress in terms of its strategic objectives, in spite of overall revenue performance continuing to be challenged in some specific activities,” said Halbert.

“We’re particularly pleased with the overall performance in [the] KC brand, (most notably in the consumer channel). Fibre services continue to see strong levels of uptake, well above the UK average, and demand remains ahead of our own initial expectations. Increasingly this investment will allow us to design and introduce advanced fibre-based services.”