LONDON (Alliance News) - KCOM Group PLC raised its dividend and pledged a continued investment in the roll-out of high speed fibre-based broadband products, as it said Friday that pretax profit rose in the year to end-March.
The telecommunications company posted a total dividend of 4.88 pence per share, up from 4.44p, after declaring a 3.25p final dividend, up from 2.97p a year before.
KCOM reported pretax profit of GBP50.5 million, up from GBP47.7 million in the previous year, despite seeing revenue decline slightly to GBP370.7 million from GBP372.9 million, offset by lowered operating expenses.
The company's KC business saw revenue of GBP105.0 million, edging up from GBP104.6 million, driven by the take-up of fibre which offset lower business revenues.
Its current take-up rate is 27% with an average revenue per use of over GBP5 per month, and KCOM said it remains on target to roll-out fibre to 45,000 premises by December 2015.
Within its Kcom division, revenue declined slightly to GBP270.9 million from GBP273.4 million. This business, which is focused on communications and IT services for the enterprise and public sector markets, has been hit by the company shifting its focus away from its legacy carrier-only business towards broader 'value-added' product suites.
In its large enterprise market Kcom's carrier-only revenues declined, hampered by ongoing pricing pressure from regulatory changes, and KCOM expects these revenues to continue to decline in the new financial year.
The company said there was continued demand for connectivity amongst its small-medium business customers, which are looking for a range of communications packages with low up-front investment and full-service support.
Amongst its enterprise customers, demand is more focused on multiple communications and services, including cloud-based offerings, under one contract.
The company said it believes that this enterprise market "will exhibit significant growth" and provides opportunities for its business.
KCOM reiterated its focus on the roll-out of fibre broadband, saying it will invest in expanding the reach of the services and drumming up customer demand.
During the year it posted a depreciation and amortisation of GBP20.3 million, up from GBP19.6 million, as a result of its investment and expects this charge to increase going forward.
Capital expenditure for the year was GBP27.9 million, up from GBP28.0 million, and KCOM expects this to increase to around GBP25 million in the current year as it invests in fibre, IT services and customer specific investments.
The company agreed a new GBP200.0 million revolving credit facility on Wednesday, and said that this refinancing has provided it sufficient funding for both organic and inorganic growth.
"The re-financing of the business coupled with the underlying strength of the group, gives us the confidence and capacity to consider targeted investment in both organic and inorganic growth opportunities to strengthen our competitive position," said Chief Executive Bill Halbert in a statement.
Shares in KCOM were trading up 2.3% at 92.97 pence Friday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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