KCom celebrates major contract in the public sector

TELECOMS and business services group KCom continued its path to growth as it reported a raft of new contracts, including a key deal in the battered public sector.

The Hull-based group, which serves homes and businesses in East Yorkshire with its Kingston Communications (KC) arm, plus bigger businesses and organisations across the UK via its KCom division, added it is trading in line with market expectations.

Shares in the company fell slightly, down 0.84 per cent to 58.75p.

KCom said it had won a contract with Staffordshire County Council to create one of the UK's first public sector networks (PSN). The network will initially link all 200 council sites and the authority's 400 schools.

All of the region's borough and district councils, plus its health authority, have agreed to join the PSN, meaning around 50,000 computers and devices will be linked.

The five-year contract is worth about 23m and extendable to 10 years. The PSN incorporates wide and local area networks, multiple telephony services, a new call centre system, mobile phone connections and security functions.

"Staffordshire has an excellent track record in developing partnerships that enhance the council's IT services. The introduction of a public sector network is the logical next step and a compelling opportunity," said Sander Kristel, chief information officer at the council.

KCom said it hopes to win more PSN contracts from the public sector.

"Further PSN developments across the country, and the continued extension of existing customer relationships, are among the key market opportunities for KCom," it said.

The group also announced new deals with Virgin Atlantic Airways, Sky Bet, Volkswagen and the renewal and extension of managed services for Admiral Insurance.

KCom executive chairman Bill Halbert, who recently agreed to stay on in the role until 2012, said: "Recent customer wins in KCom and Smart421 and the introduction of new services within KC demonstrate our increasing strength and competitiveness in our chosen markets.

"Our ability to build strong relationships and help our customers exploit the power of communications to deliver tangible benefits, underpin our positive outlook for future years."

FinnCap analyst Andrew Darley said the new contracts are "not bad for a summary of one quarter's business wins".

FinnCap sees KCom's sales this financial year – ending in March – falling about 19m to 393.9m, before rising to 401.9m in 2012. It expects pre-tax profits to surge from 36.9m last year to 45.4m.