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By | Kat Hall 27th May 2016 09:57

It's a Hull of a thing: Kcom takes a break from 8-year sales slide

Sidles up to the enterprise: Psst, want some IP?

Telecoms provider Kcom stemmed its declining revenue for the first time in eight years, reporting growth of 0.4 per cent to £349.2m for the full year 2015/16.

However, operating profit fell to £6.3m from £50.9m mainly due to increased investments, compared with the previous year. That was mainly due to its fibre roll-out in Hull and East-Yorkshire which the company reckons will bring superfast broadband to 150,000 premises.

Capital expenditure will be more than £40m per annum over the next two years as that investment continues.

The company attributed its growth to an increase in enterprise business - in particular contracts such as its multi-million pound deal to provide hosted contact centres to HMRC.

At the end of last year Kcom sold its network outside Hull to CityFibre for £90m. That included 1,100km of its duct and fibre network in 24 cities - signalling Kcom's move away from infrastructure.

The move has significantly swelled Kcom's coffers.

Speaking to The Register chief executive Bill Halbert, said the business will focus on enterprise, indicating Kcom will step away from the mid-market where its internet business – formerly branded Eclipse – has traditionally operated. Last year Eclipse was hit by a series of DDoS attacks.

As such it expects revenue to remain flat for the coming years.

He said: "We see greatest opportunity for further material shareholder value creation being derived from the successful continued development of our enterprise customers and our Hull and East Yorkshire consumer and small business customers."

"Our increased investment in, and focus on, those areas will in turn will lead to an accelerated decline in revenue in the SMB area over time."

In a separate announcement, Kcom's chief financial officer Paul Simpson, will be leaving the business in September 2016. Simpson has been with the company for 15 years and has sat on its board since 2004.

The biz recently consolidated its four operating brands into a single one – Kcom. ®

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