Kingston swings to loss

May 22, 2001
Web posted at: 1022 GMT

LONDON (CNN) -- UK telecoms company Kingston Communications swung to a full-year pretax loss of £13.2 million as it spent money on network expansion.

Kingston, which was a council-owned incumbent operator in the northern city of Hull until 1999, said its long-distance network had been completed, while its metropolitan coverage had doubled to 25 major towns and cities.

But the investment in the rollout had resulted in the pretax loss, compared to a profit of £8.6 million a year earlier. The company said on Tuesday it would not be paying a dividend.

Chairman Michael Abrahams said that the development of the national network, which was lit this month, was already beginning to pay off.

"Encouragingly, we have seen strong growth in underlying EBITDA [earnings before interest, tax, depreciation and amortisation] from £3 million in Q3 to £7.3 million in Q4 as we begin to see returns from earlier investments," he said.

Kingston says it is not suffering the debt problems of many other telecoms companies.  It reported £1.2 million in net debt at year's end and a £250 million facility in place.

But it has pulled back on its plans to develop a national interactive TV service, using DSL technology that exploits copper telephone wires, because of unfavourable regulatory and financial environments.

Kingston was partially floated on the London stock exchange in 1999. Hull City Council retains a 44.9 percent stake in the company.

Kingston (KCOM) shares rose 7 percent in London trading  to 122.25 pence.

Kingston Communications

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