Trading Statement

KCOM Group PLC (KCOM.L) Trading Statement

KCOM Group PLC ("the Group") issues the following trading update ahead of its Interim results for the half year ending 30 September 2010, due to be announced on 23 November 2010.

Current trading

KCOM Group's trading is in line with market expectations, with net profitability at the half year expected to be ahead of the previous year.

As previously indicated, and as a direct result of the disposal of certain customer contracts to Phoenix IT and our exit from lower value activities, revenue for the first half of the year will be lower than that for the same period last year.

Banking and Pensions

Our aims for this year, alongside returning to growth, are to provide medium term certainty with regard to our pension funding position and to renew our banking arrangements.

Discussions with banks are progressing to plan and we expect to provide further clarity on our banking arrangements when interim results are announced.

Following the conclusion of consultations to close KCOM's two defined benefit pension schemes to future accrual, the Group will introduce a single defined contribution scheme from 1 October.

Outlook

The Group continues to build on progress made during the last two years, as well as securing future growth by exploiting core strengths and capabilities and leveraging strategic partnerships which extend the reach and range of our communications services.

We continue to strengthen the overall financial position of the Group through a combination of measures including debt and working capital management and rigorous cost control.

Forward-looking statements

Certain statements in this statement are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

We undertake no obligation to update any forward-looking statements whether as result of new information, future events or otherwise.