Communications solutions provider KCOM Group Plc (KCOM.L) Friday reported a decline in pre-tax profit for the full year, reflecting mainly restructuring costs related to organizational changes. Net profit improved due to lower tax expense.
The board is also proposing a higher final dividend and has made a further commitment to a 10 percent per annum dividend growth over the next three financial years, ending March 31, 2016. The shares rose about 10 percent in the morning trade.
Executive Chairman Bill Halbert stated, "The Group has made further progress in improving the quality and long term sustainability of the business. This is evidenced by the continued strong performance in KC and some of the key customer wins during the year, as a result of the strengthening of our competitive position in target markets."
The company's KC segment covers performance of its KC brand, which operates telephony and broadband over East Yorkshire network. The segment revenues increased 0.9 per cent to 104.6 million pounds.
For the fiscal year ended March 31, 2013, the company posted profit before tax of 50.38 million pounds, lower than 51.12 million pounds in the previous year.
Excluding exceptional items, pre-tax profit increased to 52.7 million pounds from 51.1 million pounds a year ago. Exceptional items for the recent year totaled 2.31 million pounds mainly due to restructuring costs related to employees.
Profit attributable to owners of the parent increased to 37.9 million pounds or 7.39 pence per share from 37.73 million pounds or 7.13 pence per share in the prior year. Adjusted earnings for fiscal 2013 were 7.70 pence per share.
Tax expense for the year declined to 12.48 million pounds from 13.40 million pounds a year earlier.
Annual revenues dropped 3.7 percent to 372.87 million pounds, mainly due to a previously disclosed one-off network build contract in the prior year totaling 11.7 million pounds.
In addition, the board is proposing a final dividend of 2.97 pence per share, up 11.2 percent from last year, to shareholders of record on June 28, 2013, payable on August 2. This will result in a total annual dividend of 4.4 pence per share, an increase of 10 percent from last year.
In London, KCOM shares are currently trading at 84.11 pence, up 7.26 pence or 9.44 percent, on a volume of 927,492 shares.
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