KCOM Regulatory News (KCOM)

21 July 2017

KCOM Group PLC (KCOM.L)

("KCOM or "the Company")

AGM Trading Update

Ahead of its Annual General Meeting to be held at the KCOM Stadium in Hull later today, the company issues the following trading update.

There has been an encouraging start to the current financial year and the business is trading in line with our expectations.

Our fibre deployment in Hull & East Yorkshire remains on schedule to reach 150,000 premises, representing approximately two-thirds of our addressable market, by December 2017 and we continue to see high levels of customer take-up. In Enterprise, having strengthened our sales, delivery management and technical capability, we are able to respond quickly to customer demand using a scalable operating model that can expand as demand grows. We have seen a number of new customers in the first quarter.

We continue to execute our stated strategic plans to create shareholder value through a combination of the completion of fibre roll-out in Hull and East Yorkshire, launching 'over the top' services that build average revenue per user on top of existing sustainable revenue streams and a focus on the Company's higher growth, higher margin, capital light Enterprise business. The Board is confident the transition of KCOM into a provider of regional fibre-based services and complex IP solutions to the enterprise market will in time drive a re-rating of the Company's valuation.

As previously indicated, whilst we expect to make further progress in both Hull & East Yorkshire and Enterprise, as we transition away from commoditised services, we expect there to be a decline in revenues and margins associated with our legacy activities.

Subject to shareholder approval at today's Annual General Meeting, and consistent with the Company's stated dividend policy, the final dividend of 4.00 pence per share will be paid on 1 August 2017 to shareholders on the register as at 23 June 2017.

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