Nov 26 (Reuters) - British telecoms company KCom Group Plc reported a 5.4 percent drop in first-half profit, hurtby increased investment in infrastructure and broadband fibredeployment services in the Hull and East Yorkshire region.
KCom Group, which caters to enterprise and public sectororganisations across UK, said it remained confident about thegroup's longer-term prospects and success, and expected thefull-year outturn to be in line with market expectations.
KCom said profit before tax fell to 24.7 million pounds($39.9 million) in the six months ended Sept. 30 from 26.1million pounds a year earlier. Revenue fell 1.7 percent to 185.5million pounds.
Shares in KCom fell as much as 6.1 percent in morning tradeon Tuesday on the London Stock Exchange, making it one of thetop percentage losers on the FTSE-250 Midcap Index.
KCom said separately that it would split the roles of itschairman and chief executive. Halbert will assume the role ofgroup chief executive in April 2014, while board member GrahamHolden will take over as non-executive chairman.
The company also said it won a major government contract butdid not disclose details of the size and type of contract.
"It is the largest contract we have won in our currentguise. We will conclude the contract negotiations in the secondhalf, but we don't expect to begin work on the contract untillate in the second half," Halbert told Reuters.
The contract will give the company a boost and offsetexpected negative EBITDA effects of regulatory changes, FinnCapanalyst Andrew Darley said in a note.
The company said it expects a 5 million pound hit to futurerevenue due to regulatory changes, including the outcome of thewholesale narrowband market review.
Revenue from its KC division, which operates in Hull andEast Yorkshire, fell marginally to 53.3 million pounds due to areduction in business revenue and publishing.
Revenue fell 2 percent to 134.7 million pounds in its Kcomdivision, which accounts for three-fourths of total revenue.
KCom group's customers include City of London Corp andDorset County Council in the public sector and WM Morrisons, Dominos Pizza Group, and British Airways in the private sector.
Shares in the company were down 3 percent at 101.9 pence at1050 GMT.