KCOM Regulatory News (KCOM)

KCOM Group PLC Trading Update

KCOM Group PLC ("the Group") issues the following trading update ahead of its Preliminary results for the year ending 31 March 2010 which will be announced on 25 May 2010.

Current trading

Group performance remains in line with expectations with the substantial improvement in the performance of Kcom, our managed communications business, complementing the continued resilience of our Kingston Communications business.

The Group will exit the financial year with significantly reduced bank debt and a net debt to EBITDA ratio of below two times, clearly underlining our commitment to continue to strengthen the Group's overall financial position.

The Group confirms also that it has now completed the agreement with Phoenix IT Group ("Phoenix") resulting in Phoenix acquiring certain field maintenance and support contracts and creating another key partnership, whereby Phoenix provides national coverage for those activities, on behalf of KCOM Group.

The previously announced agreement with BT continues to progress well with the first significant milestones in the transformation of the Kcom network taking place in March. The physical interconnection of two Kcom network nodes with the BT21CN network facilitates the seamless delivery of services across both networks.

Outlook

The Board remains confident that the actions it has undertaken over the past 18 months will see continued improvement in the overall quality of the Group's activities. The progress we have made will see us exit the year in a stronger financial position and with an improved competitive position from which to develop.

Commenting on today's announcement, Executive Chairman, Bill Halbert said:

"The Group continues to make encouraging progress, focusing on strengthening underlying business fundamentals, while at the same time positioning the business competitively to exploit the growth opportunities that are now available to us.

We close the year with a strengthened overall financial position, as evidenced by the progress we have made in reducing the Group's net debt, whilst importantly also having significantly enhanced the capability of our business through the strategicrelationships we have entered into with Phoenix and BT."

Forward-looking statements

Certain statements in this interim statement are forward-looking. Although the Group believes the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

About KCOM Group PLC

The KCOM Group delivers communications services to a range of businesses and consumers, with an emphasis on exceptional service delivery.

Its Kcom business provides communications services for national multi-site enterprise and public sector organisations across the UK. As an independent provider of these services, supported by its BT Wholesale partnership, Kcom is able to offer advanced network capability and related added value services, coupled with a flexible approach to delivering its customers' requirements.

Its Kingston Communications business provides a range of communications services to businesses and consumers in Hull and East Yorkshire. Eclipse Internet delivers a portfolio of internet based communications services. These are designed to help small businesses and home based workers to exploit the power of the internet to achieve business success.

For more information on the KCOM Group, please go to www.kcomplc.com

For further information please contact:

KCOM Group PLC:

Bill Halbert, Executive Chairman

Paul Simpson, CFO

Tel: 01924 882952 (PA: Annette Watling)

Karen Butler, Corporate Communications Manager. Tel: 01482 602135

Brian Hudspith / Amanda Martyr Maitland Tel: 0207 379 5151