The Hull and East Yorkshire division has been the key focus at KCom (KCOM) over the past year. The rollout of fibre-to-the-premise broadband is on track to reach 150,000 homes and businesses by this coming December. Around 137,000 premises have already been reached with a 30 per cent average take-up rate in areas where KCom's service is available. Consumer revenue here was thus up 3 per cent, although lower public sector spend and a tough comparable saw business revenue fall.
The separate enterprise division offers IT and integration services to UK companies, with contact centres and "cloud deployment" a focus. The good news is that customers such as HMRC and Bupa have built up their contracts with KCom. The revenue for its top five customers grew by 16 per cent year on year. But anticipated cost overruns on two fixed price software developments held back margins.
The company has begun to sell off assets in the remaining national network services division. Analysts at broker finnCap expect pre-tax profit of £33.4m in the year to March 2018, giving an EPS of 5.4p, compared with £38.5m and 6p in FY2017.
| KCOM (KCOM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 90.5p | MARKET VALUE: | £468m | |
| TOUCH: | 90.5-90.75p | 12-MONTH HIGH: | 121p | LOW: 87p |
| DIVIDEND YIELD: | 6.6% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 19p* | NET DEBT: | 42% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 373 | 47.7 | 7.1 | 4.44 |
| 2014 | 371 | 50.5 | 7.6 | 4.88■ |
| 2015 | 348 | 16.7 | 2.5 | 5.37 |
| 2016 | 349 | 88.7 | 14.0 | 5.91 |
| 2017 | 331 | 30.5 | 4.9 | 6.00 |
| % change | -5 | -66 | -65 | +2 |
Ex-div: 22 Jun Payment: 1 Aug *Includes £97m of intangible assets, or 19p a share | ||||
