Creating connections
that matter

KCOM Group PLC
Annual report and accounts 2015/16

We are
KCOM

By listening to, and learning from, our customers, we design and deliver the right services to connect them with the things that matter.

On 4 April 2016 we brought together all our brands to create a single, integrated business, making it easier for all our customers to access the full range of our capability and expertise.

Highlights

Revenue £m
£349.2m +0.3%
EBITDA1 £m
£74.9m +0.8%
Operating profit1 £m
£50.9m -11.0%
Profit before tax1 £m
£47.9m -7.0%
Net funds/(debt) £m
£7.4m +107.5%
Proposed full year dividend (pence per share)
5.91p +10.1%
  1. Before exceptional items.

Operational highlights

  • Progress in all key focus areas leads to year on year growth
  • Important progress with our enterprise customers, increasing our services to HMRC and securing further new business including Association of Train Operating Companies (ATOC), Bupa and Shoosmiths
  • Accelerated fibre deployment and strong take-up of ultrafast broadband in Hull and East Yorkshire
  • Successful launch of single business under new KCOM brand
  • National network asset disposal for £90.0 million, strengthening the balance sheet, supporting accelerated investment and underpinning medium-term dividend commitment

Enterprise

Delivering flexibility and lower costs for National Rail Enquiries

National Rail Enquiries is the definitive source of customer information for passenger rail services but its website infrastructure was overly complex and unable to scale to meet peaks in demand. We modernised its architecture and moved multiple applications into the cloud to reduce infrastructure costs, increase flexibility and improve information for passengers.

Business

Keeping RNLI lifeboat stations connected

The Royal National Lifeboat Institution (RNLI) is the charity that saves lives at sea, with its volunteers providing a 24-hour search and rescue service in the United Kingdom and Republic of Ireland. A wide area network from KCOM connects the RNLI’s 237 lifeboat stations, helping the charity to spread the word about its lifesaving work.

Image: Nigel Millard

Consumer

No arguing over who’s using the internet

When the Wilkinson family heard KCOM's superfast broadband was available in their area they jumped at the chance to have it installed. It means the whole family can be online at the same time with no issues - and no arguing over who's using the internet.

Our business at a glance

Our goal is to make life easier and better for our customers

We help customers create greater value from the way they interact, collaborate and connect with what matters to them

In 2015/16, we reported our activities under two reporting segments:

Kcom segment

Businesses and public sector organisations across the UK

Revenue
£249.9m

KC segment

Consumers and businesses in Hull and East Yorkshire

Revenue
£104.5m

Enterprise

Our markets
Organisations with complex needs look to us to help them integrate and leverage technology

Served by Smart421 and Kcom

Segment Kcom

Our customers
  • ARM Holdings
  • Bupa
  • HMRC
  • National Rail Enquiries
  • NFU Mutual

Business

Our markets
We help businesses embrace the power of technology to become more successful

Served by KC and Eclipse

Segment Kcom and KC

Our customers
  • Arrow XL
  • Foot Anstey
  • Furniture Village
  • Hull College Group
  • RSPB

Consumer

Our markets
Households across Hull and East Yorkshire can choose from our range of voice, broadband and TV services to suit their needs

Served by KC

Segment KC

Our customers

130,000+ households in Hull and East Yorkshire

Our key partners

  • Amazon Web Services
  • BT Group
  • Cisco
  • CityFibre
  • Comms-care
  • Daisy
  • Metaswitch
  • Microsoft Azure
  • Our business model

    Harnessing technology

    Connecting people and organisations to the things that matter

    • Our customers

      We listen to and learn from our customers to better understand their needs

      Our strategic partners

      We work closely with carefully selected partners to create combined service offerings

      The communities we serve in Hull and East Yorkshire

      We have a significant presence in Hull and East Yorkshire and retain a key focus on this market

      The skills, expertise and experience of our people

      Our people are one of our key differentiators in delivering value to our customers

      Our technology platforms

      Our continued investment in our technology platforms underpins our ability to provide integrated solutions to customers

      • Enterprise

        Consulting, integration and managed services for the enterprise customer, focused on contact, collaboration and communication

      • Business

        Cloud, hosted and communication-based services for businesses, packaged increasingly on a subscription or managed service basis

      • Consumer

        Phone and broadband-based services for the Hull and East Yorkshire consumer market, to help people communicate and live their lives in a digital age

      • Supported by:

        • Thought leadership
        • Customer service operations
        • Technology and innovation
        • Finance
        • IT
        • HR
        • Product and proposition development
    • Managing complexity

      We manage complexity for our customers. We take time to understand their desired outcomes and enable them to exploit technology through the integration of new and existing capability


      Deploying our expertise

      Our people are experts not just in communications and IT but also in the increasingly important fields of business innovation, technology change and digital transformation


      Our approach to technology

      We believe technology is key to creating value. Our skills in integration and design mean we can bring together multiple services to deliver tangible business outcomes

    • For shareholders

      • Strong funding and cash generation
      • Clear dividend commitment
      • Investment in future growth opportunities

      For customers

      • We help enterprises use collaboration and communication tools to enhance their business performance
      • We help small and medium-sized businesses to operate more effectively, provide better customer service and achieve growth
      • We help consumers live more connected lives

      For employees

      • Personal growth and development opportunities
      • Flexible benefits and wellbeing initiatives

      For local communities in Hull and East Yorkshire

      • High quality employment opportunities
      • Contribution to local economy
      • Support of local business and community initiatives