KCom healthier as it takes action to bring down levels of debt

The Hull-based company, which operates domestic telecoms and internet services in East Yorkshire through its Kingston Communications arm, said it will finish its financial year on March 31 in a stronger position.

In recent months KCom has signed two outsourcing deals with BT and Phoenix IT, which allow it to benefit from their wider reach and reduce maintenance costs.

The Phoenix deal, which involved the transfer of 142 staff, allowed KCom to move away from its role as a provider of standalone field maintenance and support, "where it has neither the scope nor scale to compete effectively".

The BT agreement allowed Kcom access to its national network and other services, helping it win contracts such as a deal with mobile phone retailer Phones4U.

"The group continues to make encouraging progress, focusing on strengthening underlying business fundamentals, while at the same time positioning the business competitively to exploit the growth opportunities that are now available to us," said executive chairman Bill Halbert.

"We close the year with a strengthened overall financial position, as evidenced by the progress we have made in reducing the group's net debt, whilst importantly also having significantly enhanced the capability of our business through the strategic relationships we have entered into with Phoenix and BT."

KCom said its ratio of net debt to underlying earnings will be below two times by the end of the month, "clearly underlining our commitment to continue to strengthen the group's overall financial position".