K3 Business Technology Group PLC Trading Update (5385C)
June 18 2019 - 1:00AM
UK Regulatory
TIDMKBT
RNS Number : 5385C
K3 Business Technology Group PLC
18 June 2019
18 June 2019
AIM: KBT
K3 BUSINESS TECHNOLOGY GROUP PLC
("K3" or "the Group" or "the Company")
Trading Update
K3, which provides mission--critical business software, cloud
solutions and managed services, is pleased to provide a trading
update for the six months ended 31 May 2019.
The Group continues to progress well, with the benefits of
transformation initiatives coming through across all key areas of
activity, and the Board believes that K3 remains on track to meet
current market expectations for this year although results will be
more second-half weighted than usual. Management's focus on cash
generation and strong financial management continues, and net debt
at 31 May 2019 is 32% lower at GBP5.8m than a year ago (31 May
2018: GBP8.5m), with the improving trend expected to continue.
The strong weighting towards the second half of the financial
year reflects the high proportion of software licence and
maintenance contract renewals that fall in the final quarter, but
also Brexit-related disruption. This was felt in prolonged customer
decision-making processes, which consequently affected services
activity in the period. However towards the end of H1 a number of
major deals closed, with the ongoing pipeline looking very
healthy.
Three new customers were signed for 'K3 I fashion', including
Regatta, the outdoor clothing brand, plus two existing customers
significantly ramped-up software licence orders. Significantly,
four of the new orders were secured through channel partners.
Prospects for 'K3 l fashion' received a further boost by
Microsoft's recommendation as its preferred 'add-on' for the
fashion industry globally.
In other key areas, sales from Global Accounts and Managed
Services, which includes hosting, continued to grow, and 'K3 I
Cloud', the Group's Infrastructure as a Service ("IaaS") offering
was launched. The period also saw a high-profile implementation of
Microsoft Dynamics for Fortnum & Mason 'go live'.
'K3 I Imagine', which is a cornerstone product in K3's
transition to an IP-lead organisation, is expected to make a
meaningful contribution to the Group's recurring revenue in the
current financial year, from a standing start in November 2018.
Imagine revenues are now being generated from Software applications
("SaaS") and Platform access ("PaaS") and the product has potential
across the whole spectrum of the K3 customer base.
Half year results are expected to be reported on 9 July together
with a further update on trading.
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
Enquiries:
K3 Business Technology Adalsteinn Valdimarsson, T: 020 3178 6378 (today)
Group plc CEO
www.k3btg.com Robert Price, CFO Thereafter 0161 876
4498
finnCap Limited Julian Blunt/ James Thompson T: 020 7220 0500
(Nominated adviser and (Corporate Finance)/
Broker) Camille Gochez
(Corporate Broking)
KTZ Communications Katie Tzouliadis/ Dan T: 020 3178 6378
Mahoney
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Authority to act as a Primary Information Provider in the United
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contact rns@lseg.com or visit www.rns.com.
END
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