Brighter future at Kingston

The company with the white phone boxes is still in the red

The new head of Kingston Communications says the troubled telecoms firm has finally turned round its finances as the company trimmed its first-half losses.

Pre-tax losses at the Hull-based company narrowed to £8.75m from £10.3m the year before.

As it announced the figures, Kingston also confirmed that chief financial officer Malcolm Fallen would now assume the role of chief executive.

He has acted as interim CEO since the departure of former chief executive Steve Maine three months ago.

Job cuts

Fallen said he was confident the business was on its way back to profitability, having cut annual operating costs by more than £10m.

That had been achieved largely by cutting 140 jobs from the group's 2,300-strong workforce.

Although his first job was to announce the £8.7m shortfall, which takes Kingston's overall debt to £107m, he stressed that £5m of the losses came from shedding jobs and closing down operations.

He said that, without these "one-off" costs, the company had lost just £3m over the past six months, a 65% improvement on last year's performance.

"Crowded" market

Kingston was now on course to record at least break-even figures, after taxes and costs, by the 2004-5 financial year, he added.

He cautioned that it operated in a "crowded landscape" of companies competing with BT, Cable & Wireless and Colt Telecom.

The directors believe that the group is capable of delivering profitable growth for the future Michael Abrahams, Kingston Communications chairman

But he declined to comment on persistent speculation that Kingston will sell its corporate telecoms arm and retreat to Hull.

"We're committed to the businesses we have,"he said. "They're all making progress at different rates."

Chairman Michael Abrahams said: "The directors believe that the group is capable of delivering profitable growth for the future.

"The cost reductions identified so far will underpin the group's short-term expectations."