Kingston Communications Preliminary Results 200405

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Kingston CommunicationsPreliminary Results
2004/05
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IntroductionMichael AbrahamsChairman
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Introduction

• Strong underlying financial performance
• Strategy defined and being implemented
• Proposed dividend

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Financial PerformancePaul SimpsonChief
Financial Officer
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H2 Financial Outlook- November 2004

• Sustain quality revenue performance
• Management of Group cost base
• Cash flow generation
• Continuing returns to shareholders

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Financial Highlights
Note Results are continuing operations before
exceptional items Adjusted EPS excludes
amortisation of goodwill
Includes interim 0.36p and proposed final
0.54p
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Group Activities Revenue and EBITDA
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Affiniti Revenue and EBITDA
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Affiniti EBITDA and Capex
m
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EY Contact CentresRevenue and EBITDA
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Group Reported Earnings
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EPS and DPS

• Adjusted EPS of 4.1 pence (2004 loss 1.2 pence)
• Excludes exceptional items, amortisation of
  intangible fixed assets, deferred taxation
• Full year distribution of 0.9 pence per share
• Interim 0.36 pence per share
• Proposed final dividend of 0.54 pence per share

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Net Debt
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Cash Flow
Net cash flow pre interest is net cash inflow
from operating activities less capital
expenditure and financial investment
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Proposed Disposal of Arche

• Telindus Group NV
• Euros 47 million
• Cash and debt free basis
• Implied historic EBITDA multiple of 7.3x
• Conditional on French Competition Authority
  approval

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IFRS Update

• Group will report 2005/06 consolidated Interim
  results on an IFRS basis
• On track to meet reporting requirements
• Areas identified
• FRS 17, Accounting for pensions and employee
  benefits (IAS 19)
• Accounting for acquisitions (IFRS 3)
• Share based incentive schemes (IFRS 2)

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Financial Outlook

• Continued revenue growth
• Affiniti enhanced capability
• KC EY broadband opportunities
• Reduced debt
• Financially well-positioned to pursue profitable
  growth
• Returns to shareholders

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Business ReviewMalcolm FallenChief
Executive
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Strategic Focus

• Clear focus on UK target customers
• Managing our customers communications needs
• Service Experience
• Technology migration
• Converged communications
• Sustainable, profitable growth
• Delivering returns to shareholders

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Delivery of Strategy

• Organised around customers
• Acquired the right businesses
• Eclipse
• Omnetica
• Technica
• Exited the wrong businesses
• Satellite Broadcast
• Italy
• France

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Affiniti
Build a Better Connected Enterprise

• IP Data
• From legacy voice to IP Telephony
• Messaging, Rich Media, Contact Centre

• PSTN, Mobile, Internet, Leased Line, Broadband,
  IP VPN, Wireless
• Cabling, Optical
• 2200km UK wide broadband network

• From consult and design to a fully managed
  security service

Enhance Customer Care
Improve Business Continuity

• Technica- UKs No.1 independent storage
  consultancy
• Expertise in Cisco, EMC and many other suppliers

• End-to-End Capability
• NOCs in US, Hemel Manchester

Increase Workforce Effectiveness
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Affiniti Customer Segments
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Affiniti - Integration

• Phase 1 - complete
• Single customer-facing market proposition

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Affiniti - Integration

• Phase 1 - complete
• Single customer-facing market proposition
• Initial customer wins
• Managed services
• Cross-selling

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Affiniti - Integration

• Phase 2
• Service delivery
• Process and systems
• Driving integration benefits

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Broadband

• Rebalancing of access revenue
• Innovation of commercial proposition
• Service quality and differentiated pricing
• Strong broadband growth
• Karoo 27.7k broadband customers (up 213)
• Broadband gt dial-up
• Eclipse 46.5k broadband customers (up 77)

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External Endorsements

• ISPA Awards
• Best Carrier, Best Heavy Business Broadband, Best
  Sumo Business Broadband
• Cisco Awards
• IP Communications Partner of the Year
• Services Partner of the Year
• Scottish Partner of the Year
• Nortel Awards
• Best Customer Focus
• European DQ Awards
• Best Wholesale Service

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Summary

• Clear strategy
• Focus on integration to drive benefits
• Expectation of continued growth and improved
  financial performance
• Dividend

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