KCOM Group PLC Trading Statement

30 September 2011

KCOM Group PLC trading statement

KCOM Group PLC (the Group) issues the following trading update ahead of its interim results for the half year ending 30 September 2011, which are due to be announced on 22 November.

Current trading

 The Group continues to trade in line with expectations. Strong cash generation has been maintained and leads to a further reduction in net debt. Net debt at the half year is expected to be approximately £76.0 million (31 March 2011: £82.0 million).

In enterprise and public sector markets, there has been further growth in Kcom's multi-year contracted order backlog and Smart421's revenues continue to see strong growth.

 There has been continued strong revenue performance in KC, driven in part by customers upgrading their KC Talk packages. This includes customers taking up our recently launched bundled packages.

Eclipse, our national internet services provider, has seen further success in the SME market, with positive net business broadband additions throughout the period and growth in non-broadband sales.

Super fast broadband update

 The initial phase of our super fast broadband deployment has seen the first customers connected, in selected areas of our Hull and East Yorkshire market. This fibre to the home deployment is delivering broadband speeds of around 100mbps. As stated, the committed investment required is within existing guidance.

Corporate update

KCOM Group began trading as part of the FTSE 250 index on 19 September, following its promotion from the FTSE Smallcap index, announced on 7 September.

Outlook

The Board expects the Group to trade in line with expectations for the rest of the current financial year. The Group continues to exploit successfully its enhanced capabilities and strong track record in the provision of services to multiple-site, national organisations, and an update on recent contract wins will be included in the interims announcement scheduled for 22 November 2011.

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