K3 Business Technology Group PLC Trading update (7340T)
January 10 2017 - 1:00AM
UK Regulatory
TIDMKBT
RNS Number : 7340T
K3 Business Technology Group PLC
10 January 2017
AIM: KBT
K3 Business Technology Group plc
("K3")
Trading Update
K3, which provides mission-critical software, cloud solutions
and managed services to the retail, manufacturing and distribution
sectors, provides a trading update for the first six months of the
current financial year.
K3 has made important progress over the first half in its
operational reorganisation. However, trading in December, a key
selling period, has not been as strong as expected, reflecting a
softening in market conditions. Given the lengthening sales cycles
around larger deals and the accelerating industry shift to
cloud-based consumption, management now believes it prudent to
expect that EBITDA (pre-exceptional items) for the full year will
be approximately GBP3.5m less than the originally anticipated.
The operational reorganisation, announced in the autumn, is
largely complete and has established a more unified and streamlined
operating structure across the Group. This will enhance sales
opportunities and deliver cost efficiencies. The associated
exceptional costs are expected to amount to approximately GBP3.0m,
with the annualised future benefit likely to exceed GBP3.0m. The
Board will continue to look for additional efficiencies.
The Board views K3's prospects positively, supported by the
pipeline of opportunities and the benefits expected to flow from
the reorganisation. The quality of the Group's earnings continues
to improve as a result of the increasing adoption of cloud-based
consumption and the ongoing own IP strategy, with recurring
revenues remaining high. Cash conversion is also expected to
increase through further improvements in working capital
management.
The Board intends to issue half year results towards the end of
March.
Enquiries:
K3 Business David Bolton, Chairman T: 0161 876 4498
Technology Adalsteinn Valdimarsson,
Group plc Chief Executive
finnCap Limited Julian Blunt/James T: 020 7220 0500
(NOMAD & Broker) Thompson
KTZ Communications Katie Tzouliadis/Emma T: 020 3178 6378
Pearson
This information is provided by RNS
The company news service from the London Stock Exchange
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