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KCOM Group PLC (KCOM.L) Trading Statement 2010

KCOM Group's trading is in line with market expectations, with net profitability at the half year expected to be ahead of the previous year.

KCOM Group PLC ("the Group") issues the following trading update ahead of its Interim results for the half year ending 30 September 2010, due to be announced on 23 November 2010.

Current trading

KCOM Group's trading is in line with market expectations, with net profitability at the half year expected to be ahead of the previous year.

As previously indicated, and as a direct result of the disposal of certain customer contracts to Phoenix IT and our exit from lower value activities, revenue for the first half of the year will be lower than that for the same period last year.

Banking and Pensions

Our aims for this year, alongside returning to growth, are to provide medium term certainty with regard to our pension funding position and to renew our banking arrangements.

Discussions with banks are progressing to plan and we expect to provide further clarity on our banking arrangements when interim results are announced.

Following the conclusion of consultations to close KCOM's two defined benefit pension schemes to future accrual, the Group will introduce a single defined contribution scheme from 1 October.

Outlook

The Group continues to build on progress made during the last two years, as well as securing future growth by exploiting core strengths and capabilities and leveraging strategic partnerships which extend the reach and range of our communications services.

We continue to strengthen the overall financial position of the Group through a combination of measures including debt and working capital management and rigorous cost control.

Forward-looking statements

Certain statements in this statement are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

We undertake no obligation to update any forward-looking statements whether as result of new information, future events or otherwise.

About KCOM PLC

KCOM Group PLC is a leading provider of communications services to organisations and consumers, serving customers through four market focused brands.

KC provides a range of telephony and broadband services to consumers and businesses in Hull and East Yorkshire. Our other three brands serve organisations throughout the UK. Eclipse provides communications services to small and medium businesses across the UK, connecting them to customers, partners and suppliers and improving their productivity and flexibility, and helping them to grow. Kcom works with some of the UK’s biggest names, delivering communications services that enable them to be flexible, efficient and more responsive to their customers. Smart421 delivers high-end consultancy, integration and management of business-critical systems for enterprise customers.

We apply the collective knowledge and expertise of our people and our partners to help our customers harness the power of communications. Our focus is on the delivery of inspiring customer experiences, and finding new and better ways to connect people.