Kingston Communication is a small (£500 million or so) telecommunications service provider to both domestic and corporate sectors. They are centred in Hull where they were previously owned by the local council as a local monopoly before they converted to a plc in 1987 and partially floated in 1999 (See here for the full history), although they compete like every one else these days. They do this nationally by offering their own network with value added services and a wholesale partnership with BT, they also carry out consultancy work and offer IT support to businesses. 

They describe the results themselves as being in line with expectations which seems about right although they seem to have matched next years earnings number this year given that only very modest growth had been forecast. Meanwhile the dividend was in line with their guidance being up by 10% to 4.88 pence in total with the final dividend being 3.25 pence. Within the numbers debt came dwon to be 1x EBITDA from 1.2X as they have strong cash flow. They did however flag that this will go back up to around 1.5x next year as they have some capital expenditure requirements on some contracts, but this reflects timing differences rather than a step up in capital expenditure requirements. There is also a pension deficit of £59 million which seems manageable. They have also agreed some new facilities with which they hope to pursue some new organic and inorganic growth opportunities especially in value added services to businesses to help offset some declines in traditional network revenues. They are also apparently seeing a good consumer uptake of fibre services.

Overall a fairly small, dull but solid company in a fairly competitive field. However, the rating reflects this with it being on around 12x current earnings and offering a yield in excess of 5% which is expected to be increased by a further 10% this coming year and next as they have committed to this rate of growth until March 2016. So the yield is the main attraction with this one as the shares have been weak recently, having come down from 100 pence to the low 90's where I would have thought they should be well supported by the valuations discussed above. Thus there could even be a trade in it as I wouldn't be surprised to see it back up towards 100 pence or above in the not too distant future plus you have a yield of 3.5% to come from the final dividend alone which goes xd on the 25th June 2014. 

According to a website that tracks analysts recommendations called wkrb (sounds more like an American FM station) two research analysts have rated the stock with a sell rating, one has issued a hold rating and three have assigned a buy rating to the company. KCOM Group PLC currently has a consensus rating of “Hold” and a consensus target price of GBX 103.67 ($1.74). The range of their price targets is 75 pence to 130 pence for what that is worth.