Kingston profits fall

Hull Town Hall: City council still owns 48% of Kingston

UK telecoms group Kingston Communications has reported profits sharply down after a year of major investment.

But the company said it had achieved remarkable success in growing while staying in the black.

It is pleasing to note that the group is able to grow at such a pace

Steve Main, Kingston chief executive

Kingston Communications, privatised by Hull City Council last year, reported that profits before tax in the year to 31 March were £7.9m, down from £36m last year.

But the profits were ahead of analysts' expectations, and last year's figures were boosted by a one-off gains of £26m largely from the sale of its software subsidiary.

While profits slipped, turnover jumped by 22%, up from £148.3m to £181.3m.

Investment

Steve Maine, Kingston's chief executive, said: "The short-term impact of increased capital expenditure and start-up costs in new ventures shows, as anticipated in our decreased earnings.

"But it is pleasing to note that the group is able to grow at such a pace while remaining earnings positive."

The group's capital investment over the year was £73.4m, up 43%.

Kingston announced a deal with fellow FTSE 100 group Colt Telecom and plans to roll-out its business telecoms service in two new regions.

The Colt deal involves acting as partners in developing a national fibre-optic telecoms network.

Kingston will also launch its Torch business telecoms services in the Thames Valley and in Manchester, taking the total number of Torch regional services to six.

Visionary

The company said its interactive information service, Kingston Vision, which was launched in October, had secured 1,000 customers.

Kingston agreed a joint venture with BSkyB in February to provide content to the service.

Over the year, it has expanded its telephone franchise from the East Yorkshire area and said its next target would be 36,000 homes in the East Riding of Yorkshire.

The company, which is still 48% owned by Hull City Council announced a final dividend of 0.8347p a share.