(Reuters) - KCOM Group Plc said on Friday it expected core earnings for the current financial year to be slightly lower than a year earlier, as the telecoms services provider ramps up investments in its Hull and East Yorkshire market to accelerate growth.
Shares in KCOM, whose customers include chip maker ARM Holdings (LON:ARM) and Domino's Pizza Group, were down 2.7 percent at 103.18 pence in early trading on the London Stock Exchange.
Hull-based KCOM said it expected capital expenditure to be more than 40 million pounds per annum for the next two financial years, reflecting increased fibre investment.
Revenue from the company's KC division, which provides communication services for consumers and enterprises within Hull and East Yorkshire, fell marginally to 104.5 million pounds for the year.
KCOM is increasing its focus on growth opportunities within the Hull and East Yorkshire market, where internet data usage continues to grow.
The company sold its national network assets to CityFibre for 90 million pounds last year, as it switched focus from selling connectivity via its national fibre optic infrastructure to offering specialist help to corporates.
As a sign of confidence, KCOM said it would pay a minimum dividend of 6 pence per share in each of the next two financial years.
KCOM posted a near 1 percent rise in core earnings to 74.9 million pounds for the year ended March 31.
The company said Chief Financial Officer Paul Simpson would leave the business later this year.