The company yesterday announced the departure of its chief executive and chairman, and launched a review that could lead to a demerger and sale of its businesses.
The Guardian has reported Bill Halbert, elevated from senior independent director to executive deputy chairman, as saying the review would give a range of options and "it may well be that there are some assets that could be divested to create value for shareholders.”
The City had been pushing for action at KCOM, which has seen its shares fall almost 80% in the last six months. The shares rose 1p to 12.50p yesterday, valuing the business at £65m. At the height of the dotcom boom the shares were £15.90, making paper millionaires of many local residents who had bought in at its 1999 flotation.
Since the flotation the company has expanded well beyond Hull - where it is the monopoly telecoms provider and used to be controlled by the local city council.
KCOM has in recent years moved into the corporate IT market. The downturn has seen many customers hold off spending and yesterday Kingston slashed the value of its corporate networks operation by £107m as a result, plunging the business £103m into the red for the six months to the end of September.
There has been talk that the review could see the corporate networking business split from its Hull-based operation. The Hull business, however, also serves small and medium-sized businesses so any demerger would be complex.