TIDMKCOM
RNS Number : 3113P
KCOM Group PLC
05 June 2015
KCOM GROUP PLC (KCOM.L)
UNAUDITED PRELIMINARY RESULTS ANNOUNCEMENT FOR YEAR ENDED 31
MARCH 2015
KCOM Group PLC (KCOM.L) announces its full year results for year
ended 31 March 2015.
Highlights
-- Performance in line with expectations
-- Progress across all key focus areas
-- Success of and growth in demand for IP based 'Workplaces'
portfolio, including successful HMRC implementation and further
significant opportunities in pipeline
-- Acceleration of fibre deployment in Hull & East
Yorkshire, following continued strong demand for fibre and
broadband services, well ahead of national average
-- Business transformation continues to create more agile operating model
-- Integration of brands to focus investment on growth in the
Enterprise, Small and Medium-sized Business (SMB) and Consumer
segments
-- Continued move towards effective, efficient support
services/back office operations, implementation of common systems
and processes support consolidation of teams
-- Pre-exceptional operating profit up 4% to GBP57.2m (2014:
GBP55.0m), reported operating profit GBP22.4m (2014: GBP55.6m)
-- Adjusted basic EPS up 5% to 7.91p (2014: 7.55p)
-- Proposed final dividend of 3.58p (2014: 3.25p), representing
sixth year of at least 10 per cent dividend growth
Commenting on the results, Chief Executive Bill Halbert
says:
"Last year we began the second stage of the transformation of
our business. I am pleased to report that there has been continued
progress in our focus areas. In Hull and East Yorkshire, the strong
demand for our Lightstream fibre-based services has been maintained
and in the Enterprise and SMB markets, we continue to see growing
interest in our cloud and collaboration related capabilities. These
are the key opportunities for future growth.
"In the coming year, we will seek to accelerate that progress,
particularly in the Enterprise space where we see significant
opportunity.
"In accordance with our previously stated dividend commitment,
the Board is recommending a final dividend of 3.58p per share.
Subject to shareholder approval at the AGM, this will be the sixth
year of 10 per cent dividend progression, during which the full
year dividend has grown from 1.75p to the proposed 5.37p, a
reflection of our confidence in the Group's underlying
strength."
Business update
Businesses of all sizes are increasingly looking for a
technology partner that can provide solutions that deliver against
clear business outcomes.
In the Enterprise market, we are increasingly recognised as a
partner of choice for the delivery of complex integration projects,
as is evidenced by the successful implementation of a private
cloud, contact solution for HMRC. This success reflects our
strategic decision to invest in our IP based 'Workplaces' services
platform, migrating the business away from the provision of
declining voice and volume-based connectivity services.
Within the SMB market, we provide and support a range of
subscription-based IT and communications packages. We have seen
growing demand particularly for cloud-based services, across both
new and existing customers, resulting in continued revenue and
EBITDA margin growth in this area.
In the Consumer market, data usage continues to grow
exponentially, driving demand for both fibre-based and traditional
broadband services. Our fibre deployment in Hull and East Yorkshire
has achieved take-up of 33 per cent of premises passed,
significantly above the national average. Based on this strong
demand, we have accelerated our deployment of fibre and, by 2017,
over 50 per cent of customers will have access to these services.
The majority of our fibre services are delivered direct to the
premises, allowing us to offer speeds and capacity that can grow
readily, to match future customer demand.
Set against this progress, the revenue and margins from some of
our more traditional legacy activities have continued to decline.
Recognising this, and their diminishing importance and contribution
to future growth, an exceptional, non-cash impairment charge of
GBP33.9 million has been recognised against the goodwill balance
associated with the related acquisitions made in 2004.
Outlook
Over the next 12 months, our focus is on continuing to execute
our strategy, delivering greater value to our customers and
aligning all our assets and resources to serve the Enterprise, SMB
and Consumer segments.
To do this, we will begin the process of further integrating our
existing brands to align with those market segments. Investment
will be prioritised tightly on our strategic growth areas where we
see increasing opportunity, in particular, the provision of
cloud-based services, the integration of collaborative systems and
related consultancy and integration activity and the development of
fibre-based propositions. Building on the progress to date, we will
continue consolidating our business-wide operational and support
services to remove overlaps and duplication creating a more
scalable, agile operating model.
For further information please contact:
Bill Halbert, Chief Executive Officer / Paul Simpson, Chief
Financial Officer
KCOM Group PLC
01482 602595
Cathy Phillips, Investor Relations
KCOM Group PLC
07778 335735
Matt Ridsdale/Lulu Bridges/Mike Bartlett
Tavistock Communications
020 7920 3150
Group performance
Unaudited Audited Change
Year ended Year ended over
31 March 31 March prior year
2015 2014
(GBP million) (GBP million) (%)
---------------------------------------- --------------- --------------- ------------
Results from continuing operations
before exceptional items
Revenue 348.0 370.7 (6.1)
EBITDA 74.3 75.3 (1.3)
Operating profit 57.2 55.0 4.0
Profit before tax 51.5 49.9 3.2
Adjusted basic earnings per share
(pence) (Note 4) 7.91 7.55 4.8
Reported results
Net cash inflow from operations 50.6 71.3 (29.0)
Net debt (Note 6) 99.3 75.0 32.4
Cash capital expenditure 32.0 27.9 14.7
Profit before tax 16.7 50.5 (66.9)
Basic earnings per share (pence) (Note
4) 2.47 7.64 (67.7)
Proposed final dividend (pence) 3.58 3.25 10.2
Proposed full year dividend per share
(pence) 5.37 4.88 10.0
Segmental performance
The following analysis relates to the Group's reported segments
in the year ended 31 March 2015 and all results are
pre-exceptionals.
KC
31 Mar 31 Mar 31 Mar 31 Mar
2015 2014 2015 2014
Revenue Revenue EBITDA EBITDA
GBPm GBPm GBPm GBPm
----------------- -------- -------- ------- -------
KC 95.7 94.1 55.6 54.0
Contact centres 4.8 5.9 (0.4) 0.1
Publishing 4.3 5.0 1.2 2.0
----------------- -------- -------- ------- -------
Total KC segment 104.8 105.0 56.4 56.1
----------------- -------- -------- ------- -------
The KC segment covers communications services for Consumers and
SMBs within Hull and East Yorkshire, and provides contact centre
and publishing services. Key features of the year include:
- continued growth in consumer revenue and profitability driven
by growing demand for broadband services and increasing penetration
of bundled products with an accelerating demand for fibre
services;
- consumer Average Revenue Per User (ARPU) continues to increase
as a result of new broadband customers and fibre take-up;
- slightly weaker business performance, pipeline strengthening
particularly for fibre services; and
- an expected lower Publishing EBITDA, reflecting anticipated
decline in the Hull Colour Pages directory.
The fibre deployment across Hull and East Yorkshire continues to
achieve customer take-up well in excess of national trends. As at
31 April 2015, approximately 48,000 premises had access to fibre
with take up of 33 per cent. As a result, we have accelerated our
rate of deployment and by March 2017, we expect to reach 100,000
customers, covering 50 per cent of our network area.
Hull is included in a government funding scheme aimed at
supporting SMBs with improved digital connectivity. KC has
registered as a provider under the scheme and since launching on 1
April has achieved 110 sales with pipeline building to 450
registered interests. Fibre take-up rates in the business sector
are significantly ahead of initial expectations, at approximately
50 per cent of premises passed.
Kcom
31 Mar 31 Mar 31 Mar 31 Mar
2015 2014 2015 2014
Revenue Revenue EBITDA EBITDA
GBPm GBPm GBPm GBPm
------------------- -------- -------- ------- -------
Kcom 188.8 214.3 15.5 18.3
Eclipse 29.6 26.6 7.1 6.7
Smart 421 30.2 30.0 3.1 3.7
------------------- -------- -------- ------- -------
Total Kcom segment 248.6 270.9 25.7 28.7
------------------- -------- -------- ------- -------
The Kcom segment covers the communication and collaboration
services provided across the Enterprise and SMB activities
(excluding Hull and East Yorkshire). Key features in the year
include:
- investment in cloud-based contact services underpins
successful implementation of HMRC contract within Kcom;
- overall revenue and profit in Kcom brand impacted by continued
decline in legacy activities;
- cloud services contributing to a growing revenue and market share within Eclipse; and
- strategic progress and stronger second half order intake in
Smart421, particularly in cloud-based integration and consultancy
services.
The substantial government contract to provide a cloud-based
contact centre for HMRC was delivered successfully, ahead of the 31
January self-assessment deadline. This initial deployment was the
start of our engagement with HMRC's digital roadmap.
PLC Segment
The Group's PLC segment comprises shared service functions,
share scheme expenses, and administration costs associated with the
Group's defined benefit pension schemes. These costs (before
exceptional items) were GBP7.8 million (2014: GBP9.6 million). The
year on year decrease represents the Group's continued drive to
reduce costs and increase efficiency.
Exceptional items
The Group's net exceptional charge is GBP34.8 million (see Note
2).
Significant items include:
-- GBP33.9 million impairment charge against the goodwill
balance of legacy activities associated with historical
acquisitions made in 2004. This is a non cash item and is treated
as exceptional in line with our accounting policy.
-- GBP7.5m restructuring costs relating to cost reduction,
strategic IT investment and the move towards an integrated
operating model; offset by
-- GBP5.3 million cash receipt relation to a rebate of prior year network rates.
Refinancing, net debt and cash flow
During the year, the Group refinanced through the agreement of a
GBP200 million revolving credit facility, secured on improved
terms. This new arrangement, which expires on 30 June 2019,
provides sufficient funding to support the Group's growth.
As anticipated year end net debt increased to GBP99.3 million
(2014: GBP75.0 million), representing a net debt to pre-exceptional
EBITDA ratio of 1.3 x (2014: 1.0 x). The year on year movement in
net debt was anticipated following planned increases relating to
our services to HMRC. The Group's working capital outflow in the
year principally arose as a result of a partial reversal of the
strong cash collection in March 2014.
Dividend
The Board is proposing a final dividend of 3.58 pence per share
(2014: 3.25 pence), representing a total dividend for the year of
5.37 pence per share (2014: 4.88 pence). This represents 10.0 per
cent year on year growth in the total dividend, consistent with the
Board's previously stated commitment to grow full year dividends at
10 per cent per annum until the year ending 31 March 2016.
Subject to shareholder approval at the KCOM Group PLC Annual
General Meeting on 31 July 2015, the final dividend will be paid on
4 August 2015 to shareholders registered on 26 June 2015. The
ex-dividend date is 25 June 2015.
Pensions
The year end IAS 19 pension liability was GBP31.4 million (2014:
GBP26.5 million). The year on year increase arose as a result
of:
-- GBP22.6 million increase in liabilities, principally due to a
1.05 per cent decrease in the discount rate, mitigated in part by a
reduction in the assumed rate of inflation; offset by
-- GBP17.7 million increase on assets, due to stronger
investment returns (equity and bonds) over the year.
The agreed level of deficit repair payment (across both schemes)
for the year ended 31 March 2016 is GBP2.0 million.
Capital investment
The Group's investment profile is consistent with previous
guidance and cash capital expenditure during the year was GBP32.0
million (2014: GBP27.9 million). Specific projects include:
-- the continued deployment of fibre;
-- strategic IT investment, including the implementation of SAP
financials, driving the Group's move towards common systems and
processes; and
-- targeted customer specific investment.
The Group's depreciation and amortisation charge for the year is
GBP17.1 million (2014: GBP20.3 million). In line with its
accounting policy and in light of market activity relating to
network assets, the Group has assessed the appropriateness of the
residual values of its network assets. This has resulted in higher
residual values and a GBP4.9 million reduction in the depreciation
charge for these assets in the year.
Tax
The Group's tax charge is GBP4.1 million (2014: GBP11.8
million). The current year effective tax rate is 21.6%, broadly in
line with the prevailing rate of corporation tax. The overall
effective tax rate is 24.9% reflecting the impact of prior year
items.
Consolidated income statement
Unaudited Audited
Year Year
ended ended
31 Mar 31 Mar
2015 2014
Note GBP'000 GBP'000
---------------------------------------- ----- ---------- ----------
Revenue 1 347,984 370,697
Operating expenses (325,579) (315,090)
Operating profit 22,405 55,607
Analysed as:
EBITDA before exceptional items 1 74,304 75,291
Exceptional credits 2 6,658 2,587
Exceptional charges 2 (41,446) (1,999)
Depreciation of property, plant and
equipment (12,033) (16,882)
Amortisation of intangible assets (5,078) (3,390)
Finance costs (5,725) (5,075)
Share of profit / (loss) of associates 13 (2)
---------------------------------------- ----- ---------- ----------
Profit before tax 1 16,693 50,530
Tax 3 (4,149) (11,760)
---------------------------------------- ----- ---------- ----------
Profit for the year attributable to
owners of the parent 12,544 38,770
---------------------------------------- ----- ---------- ----------
Earnings per share (pence)
Basic 4 2.47 7.64
Diluted 4 2.44 7.55
Consolidated interim statement of comprehensive income
Unaudited Audited
Year Year
ended ended
31 Mar 31 Mar
2015 2014
GBP'000 GBP'000
----------------------------------------------------- --------- --------
Profit for the year 12,544 38,770
Other comprehensive income:
Items that will not be reclassified to profit
or loss
Remeasurements of retirement benefit obligations (7,263) (16,630)
Tax on items that will not be reclassified 1,528 2,997
----------------------------------------------------- --------- --------
Total items that will not be reclassified to
profit or loss (5,735) (13,633)
----------------------------------------------------- --------- --------
Items that may be reclassified subsequently to
profit or loss
Cash flow hedge fair value movements 1,428 1,377
Tax on items that may be reclassified (285) (275)
----------------------------------------------------- --------- --------
Total items that may be reclassified subsequently
to profit or loss 1,143 1,102
----------------------------------------------------- --------- --------
Total comprehensive income for the year attributable
to owners of the parent 7,952 26,239
----------------------------------------------------- --------- --------
Consolidated balance sheet
Unaudited Audited
As at As at
31 Mar 31 Mar
2015 2014
Note GBP'000 GBP'000
------------------------------------- ---- --------- ---------
Non-current assets
Goodwill 51,372 85,272
Other intangible assets 41,903 22,669
Property, plant and equipment 127,078 123,839
Investments 33 20
Deferred tax assets 16,306 15,408
236,692 247,208
------------------------------------- ---- --------- ---------
Current assets
Inventories 2,235 2,647
Trade and other receivables 78,790 74,135
Cash and cash equivalents 6 11,701 9,441
92,726 86,223
------------------------------------- ---- --------- ---------
Total assets 329,418 333,431
------------------------------------- ---- --------- ---------
Current liabilities
Trade and other payables (112,969) (128,314)
Current tax liabilities (2,500) (1,394)
Borrowings 6 (691) -
Derivative financial instruments (378) (137)
Finance leases 6 (1,743) -
Provisions for other liabilities and
charges (2,579) (365)
Non-current liabilities
Borrowings 6 (103,460) (84,417)
Retirement benefit obligations (31,435) (26,500)
Deferred tax liabilities (4,603) (5,057)
Derivative financial instruments - (1,669)
Finance leases 6 (5,155) -
Provisions for other liabilities and
charges (26) (425)
Total liabilities (265,539) (248,278)
------------------------------------- ---- --------- ---------
Net assets 63,879 85,153
------------------------------------- ---- --------- ---------
Capital and reserves attributable to
owners of the parent
Share capital 51,660 51,660
Share premium account 353,231 353,231
Hedging and translation reserve 442 (986)
Accumulated losses (341,454) (318,752)
Total equity 63,879 85,153
------------------------------------- ---- --------- ---------
Consolidated statement of changes in shareholders' equity
Hedging
Share and
Share premium translation Accumulated
capital account reserve losses Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ---- ------- ------- ----------- ----------- --------
At 31 March 2013 (audited) 51,660 353,231 (2,363) (319,886) 82,642
----------------------------- ---- ------- ------- ----------- ----------- --------
Profit for the year - - - 38,770 38,770
Other comprehensive income
/ (expense) - - 1,377 (13,908) (12,531)
Total comprehensive income
for the
year ended 31 March 2014
(unaudited) - - 1,377 24,862 26,239
----------------------------- ---- ------- ------- ----------- ----------- --------
Deferred tax credit relating
to share schemes - - - 134 134
Current tax credit relating
to share schemes - - - 301 301
Purchase of ordinary shares - - - (1,764) (1,764)
Employee share schemes - - - 1,365 1,365
Dividends 5 - - - (23,764) (23,764)
----------------------------- ---- ------- ------- ----------- ----------- --------
- - - (23,728) (23,728)
----------------------------- ---- ------- ------- ----------- ----------- --------
At 31 March 2014 (audited) 51,660 353,231 (986) (318,752) 85,153
----------------------------- ---- ------- ------- ----------- ----------- --------
Profit for the year - - - 12,544 12,544
Other comprehensive income
/ (expense) - - 1,428 (6,020) (4,592)
Total comprehensive income
for the
year ended 31 March 2015
(unaudited) - - 1,428 6,524 7,952
----------------------------- ---- ------- ------- ----------- ----------- --------
Deferred tax charge relating
to share schemes - - - (270) (270)
Current tax credit relating
to share schemes - - - 184 184
Purchase of ordinary shares - - - (4,058) (4,058)
Employee share schemes - - - 975 975
Dividends 5 - - - (26,057) (26,057)
----------------------------- ---- ------- ------- ----------- ----------- --------
- - - (29,226) (29,226)
----------------------------- ---- ------- ------- ----------- ----------- --------
At 31 March 2015 (unaudited) 51,660 353,231 442 (341,454) 68,879
----------------------------- ---- ------- ------- ----------- ----------- --------
Consolidated cash flow statement
Unaudited Audited
Year Year
Ended Ended
31 Mar 31 Mar
2015 2014
Note GBP'000 GBP'000
-------------------------------------------- ---- --------- --------
Cash flows from operating activities
Operating profit 22,405 55,607
Adjustments for:
- depreciation and amortisation 17,111 20,272
- impairment of goodwill 2 33,900 -
- (increase) / decrease in working
capital (14,881) 1,537
- restructuring cost and onerous lease
payments (62) (3,375)
- pension deficit payments (4,270) (788)
Tax paid (3,424) (1,531)
Loss / (profit) on sale of property,
plant and equipment 429 (456)
Profit on sale of investments (624) -
-------------------------------------------- ---- --------- --------
Net cash generated from operations 6 50,584 71,266
-------------------------------------------- ---- --------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (17,356) (16,207)
Purchase of intangible assets (14,666) (11,705)
Proceeds from sale of property, plant
and equipment - 633
Proceeds from sale of investments 624 -
Net cash used in investing activities (31,398) (27,279)
-------------------------------------------- ---- --------- --------
Cash flows from financing activities
Dividends paid 5 (26,057) (23,764)
Dividends equivalent paid to participants
of the share schemes 6 (561) (301)
Interest paid 6 (5,574) (4,436)
Capital element of finance lease repayments (1,367) -
Repayment of bank loans (45,000) (85,000)
Drawdown of bank loans 65,000 65,000
Purchase of ordinary shares 6 (4,058) (1,764)
-------------------------------------------- ---- --------- --------
Net cash used in financing activities (17,617) (50,265)
-------------------------------------------- ---- --------- --------
Increase / (decrease) in cash and cash
equivalents 1,569 (6,278)
Cash and cash equivalents at the beginning
of the year 9,441 15,719
Cash and cash equivalents at the end
of the year 6 11,010 9,441
-------------------------------------------- ---- --------- --------
Notes to the unaudited financial information
1. Segmental analysis
The chief operating decision-maker of the Group is the KCOM
Group PLC Board. The Board considers the performance of the four
brands and the PLC function in assessing the performance of the
Group and making decisions about the allocation of resources. These
are the Group's operating segments.
The KC brand addresses the needs of our Hull and East Yorkshire
customers and the Kcom, Smart421 and Eclipse brands serve
enterprise, public sector organisations and small business markets
across the UK.
The Board assessed that the Kcom, Smart421 and Eclipse brands
have similar profiles offering similar products and services,
similar production and distribution processes and are operating in
a consistent regulatory environment. In line with IFRS 8, the Kcom,
Smart421 and Eclipse brands are aggregated together and reported as
the 'Kcom' segment. The remaining brands of KC and the PLC function
are reported respectively in the 'KC' segment and the 'PLC'
segment. This reporting is also consistent with the reporting to
the KCOM Group PLC Board.
Unaudited Audited
Year ended Year ended
31 Mar 31 Mar
2015 2014
GBP'000 GBP'000
--------------------------------- ----------- ----------
Revenue
KC 104,751 105,021
Kcom 248,593 270,891
PLC(1) (5,360) (5,215)
Total 347,984 370,697
--------------------------------- ----------- ----------
Group EBITDA
KC 56,368 56,155
Kcom 25,687 28,714
PLC(1) (7,751) (9,578)
Total - before exceptional items 74,304 75,291
Exceptional items:
KC 5,027 (499)
Kcom (37,435) 1,864
PLC(1) (2,380) (777)
--------------------------------- ----------- ----------
Total exceptional items (34,788) 588
--------------------------------- ----------- ----------
EBITDA post exceptional items 39,516 75,879
(1) PLC comprises shared service functions, share scheme
expenses, and administration costs associated with the Group's
defined benefit pension scheme.
A reconciliation of total EBITDA to total profit before tax is
provided as follows:
Unaudited Audited
Year ended Year ended
31 Mar 31 Mar
2015 2014
GBP'000 GBP'000
------------------------- ----------- ----------
EBITDA post exceptional
items 39,516 75,879
Depreciation (12,033) (16,882)
Amortisation (5,078) (3,390)
Finance costs (5,725) (5,075)
Share of profit / (loss)
of associates 13 (2)
Profit before tax 16,693 50,530
--------------------------- ----------- ----------
The split of total revenue between external customers and
inter-segment revenue is as follows:
Unaudited Audited
Year ended Year ended
31 Mar 31 Mar
2015 2014
GBP'000 GBP'000
-------------------------------- ---------- ----------
Revenue from external customers
KC 99,597 99,573
Kcom 248,033 270,470
PLC(1) 354 654
---------------------------------- ---------- ----------
Total 347,984 370,697
---------------------------------- ---------- ----------
Inter-segment revenue
KC 5,154 5,448
Kcom 560 421
PLC1 (5,714) (5,869)
---------------------------------- ---------- ----------
Total - -
-------------------------------- ---------- ----------
347,984 370,697
-------------------------------- ---------- ----------
Neither revenue nor operating profit arising outside the United
Kingdom is material to the Group.
(1) PLC comprises shared service functions, share scheme
expenses, and administration costs associated with the Group's
defined benefit pension scheme.
2. Exceptional items
Exceptional items are separately disclosed by virtue of their
size or incidence to improve the understanding of the Group's
financial performance.
Unaudited Audited
Year ended Year ended
31 Mar 31 Mar
2015 2014
GBP'000 GBP'000
-------------------------------------------- ---------- ----------
Exceptional items:
- Impairment of goodwill (33,900) -
- Network rates rebate 5,278 -
- Restructuring costs (7,546) (1,121)
* Recovery of previously provided debt 756 -
* Profit on sale of investments 624 -
* Credit on termination of contracts - 2,587
- Strategic pensions advice costs - (700)
- Onerous lease costs - (178)
(Charged) / credited to operating
profit (34,788) 588
---------------------------------------------- ---------- ----------
In accordance with accounting standards, the Group's goodwill
balance is tested annually for impairment. As part of this review
the goodwill in the Group's Kcom CGU was deemed to be impaired and
as such a charge of GBP33.9m has been recognised in the
consolidated income statement. This is a non cash item and is
treated as exceptional in line with our accounting policy.
Network rates rebate relates to a settlement agreed during the
year.
As set out in our accounting policy, restructuring costs are
shown as exceptional items. During the year the Group incurred
GBP4.4m in relation to the Kcom brand in the first half of the
year, GBP1.7m relating to strategic IT investment and GBP1.4m
supporting the Group's move towards a single operating model.
Recovery of previously provided debt relates to a settlement of
the Group's written off debt due from Lehman Brothers, which was
previously charged as an exceptional item.
The profit on sale of investments relates to the sale of the
Group's previously impaired shareholding in Spectrum Venture
Management Fund, which was previously charged as an exceptional
item.
Credit on termination of contracts arose from a notification of
termination following the closure of a regional government
sponsored network infrastructure.
Strategic pensions advice costs related to the costs incurred
for the agreements reached with the Trustees of the Group's defined
benefit pension schemes to provide the Group with an efficient
mechanism of funding the Schemes' current deficit position. The
level of costs reflected both company and Schemes' advisor
costs.
Onerous lease costs arose as a result of continued
rationalisation of the Group's property portfolio.
3. Tax
The tax charge on activities is set out below:
Unaudited Audited
Year ended Year ended
31 Mar 31 Mar
2015 2014
GBP'000 GBP'000
---------------- ----------- ----------
Corporation tax (4,529) (2,572)
Deferred tax 380 (9,188)
------------------ ----------- ----------
Total (4,149) (11,760)
------------------ ----------- ----------
4. Earnings per share
Unaudited Audited
Year ended Year ended
31 Mar 31 Mar
2015 2014
Weighted average number of shares No. No.
--------------------------------------- ----------- -----------
For basic earnings per share 508,619,479 507,645,664
Share options in issue 5,169,178 5,704,438
----------------------------------------- ----------- -----------
For diluted earnings per share 513,788,657 513,350,102
----------------------------------------- ----------- -----------
Earnings GBP'000 GBP'000
--------------------------------------- ----------- -----------
Profit attributable to equity holders
of the company 12,544 38,770
----------------------------------------- ----------- -----------
Adjustments:
Exceptional items 34,788 (588)
Tax on exceptional items (7,101) 135
----------------------------------------- ----------- -----------
Adjusted profit attributable to equity
holders
of the company 40,231 38,317
Earnings per share
Pence Pence
Basic 2.47 7.64
Diluted 2.44 7.55
Adjusted basic 7.91 7.55
Adjusted diluted 7.83 7.46
5. Dividends
Unaudited Audited
Year ended Year ended
31 Mar 31 Mar
2015 2014
GBP'000 GBP'000
----------------------------------------- ----------- -----------
Final dividend for the year ended
31 March 2013 of 2.97 pence per share - 15,343
Interim dividend for the year ended
31 March 2014 of 1.63 pence per share - 8,421
Final dividend for the year ended
31 March 2014 of 3.25 pence per share 16,810 -
Interim dividend for the year ended
31 March 2015 of 1.79 pence per share 9,247 -
Total 26,057 23,764
----------------------------------------- ----------- -----------
The proposed final dividend for the year ended 31 March 2015 is
3.58 pence per share. In accordance with IAS 10 (Events after the
balance sheet date), dividends declared after the balance sheet
date are not recognised as a liability in this financial
information.
6. Movement in net debt
Unaudited Audited
Year ended Year ended
31 Mar 31 Mar
2015 2014
GBP'000 GBP'000
------------------------------------------ ---------- ----------
Opening net debt (74,976) (88,218)
Closing net debt (99,348) (74,976)
-------------------------------------------- ---------- ----------
(Increase) / decrease in the year (24,372) 13,242
-------------------------------------------- ---------- ----------
Reconciliation of movement in the
year
Net cashflow from operations 50,584 71,266
Capital expenditure (32,022) (27,912)
Interest (5,574) (4,436)
Dividends (26,057) (23,764)
Dividends equivalent paid to participants
of the share schemes (561) (301)
Purchase of ordinary shares (4,058) (1,764)
Finance leases (6,898) -
Other 214 153
-------------------------------------------- ---------- ----------
(Increase) / decrease in the year (24,372) 13,242
-------------------------------------------- ---------- ----------
Net debt comprises:
Unaudited Audited
Year ended Year ended
31 Mar 31 Mar
2015 2014
GBP'000 GBP'000
------------------------------------- ---------- ----------
Cash and cash equivalents (including
bank overdrafts) 11,010 9,441
Bank loans (103,460) (84,417)
Finance leases (6,898) -
Total net debt (99,348) (74,976)
--------------------------------------- ---------- ----------
The Group's bank facilities were refinanced in June 2014 to
replace existing facilities. These bank facilities comprise a
multi-currency revolving credit facility of GBP200.0 million,
provided by a group of five core relationship banks. The facility
matures in June 2019. The Group considers that this facility will
provide sufficient funding to support the Group's growth. In
addition, short-term flexibility of funding is available under the
GBP10.0 million overdraft facility provided by the Group's clearing
bankers.
7. Basis of preparation and publication of unaudited results
General information
KCOM Group PLC is a company domiciled in the United Kingdom. The
Group has its primary listing on the London Stock Exchange.
Basis of preparation
The Group prepares its annual consolidated financial statements
in accordance with International Financial Reporting Standards
(IFRS) and International Financial Reporting Interpretations
Committee (IFRIC) interpretations endorsed by the European Union
(EU) and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. The consolidated financial
information contained within this preliminary announcement is
unaudited and has been prepared under the historical cost
convention, as modified by the revaluation of financial assets and
financial liabilities (including derivative financial instruments)
at fair value through reserves. The financial information included
in this preliminary announcement does not include all the
disclosures required by IFRS or the Companies Act 2006 and
accordingly it does not itself comply with IFRS or the Companies
Act 2006.
The unaudited consolidated financial information in this report
has been prepared in accordance with the accounting policies
disclosed in the Group's 2014 Annual report and accounts, except as
disclosed in Note 8.
The financial information set out in this announcement does not
constitute the company's statutory accounts within the meaning of
Section 434 of the Companies Act 2006 for the years ended 31 March
2015 or 2014. The financial information for the year ended 31 March
2014 is derived from the statutory accounts for that year, which
have been delivered to the Registrar of Companies. The auditors'
report on those accounts was unqualified and did not contain a
statement under Section 498 of the Companies Act 2006. The
statutory accounts for the year ended 31 March 2015 will be
finalised on the basis of the financial information presented by
the Directors in this unaudited preliminary announcement and will
be delivered to the Registrar of Companies following the Annual
General Meeting.
The financial information contained within this preliminary
announcement was approved by the Board on
5 June 2015 and has been agreed with the Company's auditors for
release.
This preliminary announcement will be published on the Company's
website. The maintenance and integrity of the website is the
responsibility of the directors. The work carried out by the
auditors does not involve consideration of these matters.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Going concern basis
The Group meets its day-to-day working capital requirements
through its bank facilities. The Group's forecasts and projections,
taking account of reasonably possible changes in trading
performance, show that the Group should be able to operate within
the level of its current facilities. After making enquires, the
directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. The Group therefore continues to adopt the going concern
basis in preparing its consolidated financial statements.
8. Accounting policies
The accounting policies adopted are consistent with those
published in the Group's 2014 Annual report and accounts.
9. Principal risks and uncertainties
As with all businesses, the Group is affected by a number of
risks and uncertainties, some of which are beyond its control. The
key risks that we have identified will be disclosed within the
Annual report and accounts.
10. Related party transactions
The remuneration of the Directors who are key management
personnel of KCOM Group PLC will be disclosed in the audited part
of the Directors' Remuneration report in the Annual report and
accounts.
There are no other material related party transactions.
Signed by Order of the Board on 5 June 2015 by:
This information is provided by RNS
The company news service from the London Stock Exchange
END
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