Welcome

As we approach the end of 2007 to begin the Christmas festivities, we would like to share with you some highlights of the year.

We value our customers and are continually seeking ways to improve the service and support we provide, and would like to take this opportunity to thank you for being a KC customer and for your support throughout the year.

Here are some of the best KC moments of the last 12 months!

New, improved website

The entire Karoo website was re-developed and re-launched in July 2007 based on customer feedback.

A questionnaire available on the website in May 2007 gave all Karoo customers the opportunity to comment on the website and suggest ways of improving the content, design and navigation.

The common responses from users formed the basis of the improvements we made.

As well as making the website more attractive and easier to navigate, further features were added to the site that customers rated as the most important to them. These included having more local information, local news and events, local weather updates, direct access to their email account from the homepage and a new lifestyle section, all of which were implemented in July.

Protecting our broadband customers

We introduced a new anti-spam / anti-virus email solution in July to provide further protection for our Karoo customers. This means that unwanted spam emails and potentially harmful viruses hidden within emails are blocked from our customers' email accounts.

So far we've blocked over 1,100 million potentially harmful emails from reaching Karoo customers' inboxes.

Supporting the Tigers

We were delighted to announce our sponsorship of Hull City AFC in February and are proud to see the Karoo logo on the team's home kit and the Kingston Communications logo on the away kit.

It is a real honour to support our local team.

Through our sponsorship of Hull City, we have been able to offer some amazing competition prizes. Most recently, we announced the winner of a competition offering two local children the chance to become a mascot for the day.

Following a player drawing competition, judged by the players, two winners were selected and are now looking forward to meeting the players, visiting the dressing rooms and having a kick-around with Roary the mascot before leading the teams out on to the pitch ready for kick-off.

We have given away dozens of tickets to competition winners and are currently running a competition to find the most impressive photograph of a fan in their Tigers shirt at a famous location or with a famous person. The winner of this will receive a VIP day for two at the KC Stadium.

In the Community

Our company has a long standing heritage, established in Hull over 100 years ago and we feel passionately about the city and its people.

We remain one of the region's largest employers, generating wealth that flows through the local economy, benefiting both residents and other businesses. We are proud of the part that KC plays in the economy of Hull and East Yorkshire and in the local community more generally.

Community Grants
Our community grants scheme provides funding for small projects in schools, youth clubs, sports teams and other organisations that would otherwise need to rely on the often difficult task of raising funds themselves.

Projects that this scheme has supported so far include the establishment of an eco-garden at a local primary school, the provision of a new football kit for a youth team that has been making do with kit borrowed from a mens team for many years, and the purchase of equipment for a computer room in a local village hall. These may sound like relatively small things, but they are contributions that can make a big difference to the people concerned.

The Deep Learning Centre

The Deep is a hugely popular visitor attraction that we provide support to through our sponsorship of its Learning Centre. This support gives The Deep the opportunity to develop exciting educational activities that benefit local people of all ages.

The Learning Centre hosts a range of unique learning projects, from activities that support the National Curriculum to adult education workshops and special events such as its Artists in Residence programme.

We also run competitions linked to specific activities at The Deep, such as a recent pirate drawing competition for children to win a special party at The Deep funded by KC.

We have also given away 600 family tickets to visit the attraction this year by running competitions on our Karoo website.

For Christmas we were also able to invite children from special schools in the area to visit The Deep for a special guided tour and visit from Santa.

KC Talk

We were pleased to recently implement price reductions on two of our KC Talk packages. The cost of KC Talk4 was cut from £22.50 to £20.00 per month and there was also a significant reduction to KC Talk2, reduced from £15.00 per month to £14.00 per month*.

We continue to review our prices and service to ensure that we provide our customers with a value for money, quality service comparable to those offered elsewhere in the country. Of course, all of our telephony customers continue to benefit from receiving inclusive local geographic calls, as part of their call plans, something that we feel proud to boast about. On average each of our customers made 800 local calls during 2007 without incurring any additional call charges for making them. This is a huge benefit that we are pleased our customers have been able to take advantage of.

Company performance

Many local residents who hold shares in the company will have been watching the fluctuation of our share price throughout this year. The financial markets are quite turbulent at the moment. We are seeing a lot of negative market sentiment fuelled by economic uncertainty, the credit crisis and technology companies warning about future trading. This difficult climate is constraining investment in IT services. All these elements are contributing to our recent share price performance.

The Group recently announced its interim results highlighting our good first half year performance. Due to this performance and confidence about the company's future, we were able to announce an increased interim dividend payment for all our shareholders.

Our response to the summer flood

During the summer, many customers and employees alike suffered damage to their homes as a result of the floods with some suffering the upheaval and stress of moving to temporary accommodation while the long process of repairs took place.

Our business was also affected by the flooding despite the hard work and vigilance of our engineering and maintenance teams, high water levels meant that some of our network equipment was damaged, resulting in the loss of telephone and broadband connections to customers in some areas.

Our employees, some of whose own homes were damaged, worked tirelessly throughout the aftermath to try to resolve faults as quickly as possible, displaying a commitment to our customers and the business that we take immense pride in.

Throughout events, as a company that has a real belief in trying to improve the situation for our customers and our employees, we have done everything reasonably possible to ease the strain felt by those affected, going beyond what is required by the terms and conditions that apply to our services.

We witnessed the dedication and support our engineers offered to customers and colleagues alike, and that same camaraderie was apparent throughout the city as people pulled together to help family, friends and neighbours.

Finally, we would like to wish all of our customers a very merry Christmas and a happy and healthy 2008.

Best wishes from everyone at Kingston Communications.