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By | Kelly Fiveash 31st January 2008 11:49

KCom undermined by managed IT services business

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Telecoms group KCom has blamed its ailing integration and managed IT services unit for the firm's lower than expected earnings in the last quarter.

KCom, previously Kingston Communications, said in an interim management statement that the firm's results for its integration and managed services businesses had come in at the low end of its guidance range of three to five per cent earnings before interest, tax, depreciation and amortisation (EBITDA) margin.

The Hull-based company, which has about 2,700 staff, said that despite the less than pretty figures now expected, KCom remains confident that the unit will achieve EBITDA margins of between five and eight per cent for 2008/2009.

It also reckoned the managed services business will hit the seven to ten per cent range for 2009/2010, basing its forecast on business development and cost management implemented over the past year.

The firm said its telecoms and internet business still looked rosy, and noted that the division's "continued strength of performance is encouraging."

CEO Malcolm Fallen said in November (pdf) when the firm delivered its interim results that the "uncertainty in the financial services vertical sector of the market could have an effect upon our integration and managed services segment in the short term".

Shares in KCom are currently trading at 44.25 pence on the London Stock Exchange. The company will announce its prelims on 20 May 2008. ®

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