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KCOM Group PLC Trading Update

KCOM Group PLC (“the Group”) issues the following trading update ahead of its Preliminary results for the year ending 31 March 2010 which will be announced on 25 May 2010.

Current trading

Group performance remains in line with expectations with the substantial improvement in the performance of Kcom, our managed communications business, complementing the continued resilience of our Kingston Communications business.

The Group will exit the financial year with significantly reduced bank debt and a net debt to EBITDA ratio of below two times, clearly underlining our commitment to continue to strengthen the Group’s overall financial position.

The Group confirms also that it has now completed the agreement with Phoenix IT Group ("Phoenix") resulting in Phoenix acquiring certain field maintenance and support contracts and creating another key partnership, whereby Phoenix provides national coverage for those activities, on behalf of KCOM Group.

The previously announced agreement with BT continues to progress well with the first significant milestones in the transformation of the Kcom network taking place in March. The physical interconnection of two Kcom network nodes with the BT21CN network facilitates the seamless delivery of services across both networks.

Outlook

The Board remains confident that the actions it has undertaken over the past 18 months will see continued improvement in the overall quality of the Group’s activities. The progress we have made will see us exit the year in a stronger financial position and with an improved competitive position from which to develop.

Commenting on today’s announcement, Executive Chairman, Bill Halbert said:

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. 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.


Forward-looking statements

Certain statements in this interim statement are forward-looking.  Although the Group believes 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 a 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.

For further information please contact:

Karen Butler, Corporate Communications Manager 
KCOM Group PLC
01482 602135

Brian Hudspith / Amanda Martyr
Maitland 
0207 379 5151