London-listed telecoms company Kcom lost a third of its value this morning after it said its trading performance for the current financial year was “weaker than originally expected”.
Shares plunged 35 per cent from 91.8p last night to 59.5p shortly before noon.
Kcom is a Hull-headquartered telecoms and broadband provider which focuses on providing services to the Hull area which, for historic reasons, is the only place in the UK not served by BT landlines.
The company also said it was planning on slashing its dividend from 6p per share to 3p per share.
It blamed its poor performance on flat revenue driven by lower than expected orders in its enterprise segment as well as “continued customer churn” in its national network services (NNS) segment.
Its board said it sees these trends continuing into the following financial year.
Kcom said that the poor performance of the NNS business meant that the board had decided to impair the carrying value of goodwill in NNS with a non-cash exceptional item of £32.2m to be recognised in the group’s interim results which are expected on 27 November.
As a result of poor performance, the board now expects earnings before interest, tax, depreciation and amortisation (Ebitda) for the year ended 31 March 2019 to be around five per cent below market expectations.
Kcom said it expects (Ebitda) for the year ended 31 March 2020 will be “significantly below current market expectations”.
Its net debt at 30 September is £105.8m, up from £67.8m a year prior and £62.6m on 31 March.
The board said it expects its net debt at 31 March 2019 to be around 10 per cent higher than current market expectations.