Interim Management Statement

1 February 2013

KCOM Group PLC

Interim Management Statement

KCOM Group PLC ("the Group") issues its Interim Management Statement for the third quarter ended 31 December 2012.

Despite continued challenging market conditions, the Group maintained its progress during the third quarter.

In those conditions, the public sector remains an important opportunity for growth and Kcom secured a number of key contract renewals, underlining its position and reputation in that market. These renewals contributed to a further increase in Kcom's multi-year order backlog.

Kcom was named also as the preferred bidder by East Sussex County Council, to provide a hosted managed communications service on behalf of a range of public sector organisations as part of the Link Consortium arrangement. This reinforces Kcom's growing presence in the Public Services Network (PSN) market and the cloud-based service demonstrates its ability to provide additional services into existing PSN connectivity frameworks.

Smart421 and Eclipse continue to perform well in their respective markets. Smart has recently won a services and support contract with National Rail Enquiries, a division of the Association of Train Operators (ATOC). NRE provides all information for all passenger rail services on the National Rail network in England, Wales and Scotland.

KC continued to make a strong contribution to the quarter's performance and the next phase of its fibre deployment has begun in business parks and residential areas. KC is on target to start connecting customers in premises passed by this second phase over the coming months.

Commenting on trading, Bill Halbert, Executive Chairman stated, "Market conditions continue to be challenging. The Group has however continued to exploit successfully the opportunities that are there, with positive momentum across all brands. We remain confident about the quality of our business operations and their capacity to generate cash and reconfirm our commitment to a minimum ten per cent growth in the dividend in this financial year."

For further information please visit: www.kcomplc.com

Enquiries:

Bill Halbert, Executive Chairman / Paul Simpson, CFOKCOM Group PLC020 7422 8707

Cathy Phillips, Investor RelationsKCOM Group PLC07778 335735

Matt Ridsdale/Lulu Bridges/Mike Bartlett

Tavistock Communications

020 7920 3150