K3 Business Technology Confident On Future After Significant Changes

27th Mar 2018 15:13

LONDON (Alliance News) - K3 Business Technology Group PLC swung to a loss in the 17 months to November as it reorganised the business, paying a reduced dividend as a result.

The cloud solutions and managed services firm, which focuses on the retail, manufacturing, and distribution sectors, posted a reported pretax loss of GBP16.1 million in the period, compared to a profit of GBP4.5 million in the 12 months to June 2016.

Revenue for the period was GBP118.2 million, compared to GBP89.2 million in the 12 months to June 2016. Recurring revenue made up 49% of the total compared to 47% in the prior period, and the gross margin fell to 51.6% from 54.4%.

K3 is paying a dividend for the period of 1.4 pence per share, compared to 1.75p for the 12 months to June 2016.

K3 said it has undergone "significant" change over the past 18 months. It has reshaped its leadership, removed "substantial" costs, to create what it said is now a simpler, more streamlined business.

Changes as part of K3's strategy review were to focus on revenue from its own intellectual property, merging its Microsoft Dynamics business into one body, and integrating all software development and own IP management functions into one unit.

These have delivered savings of over GBP5.0 million a year, K3 said, and it is confident the shake-up will lead to an improved sales process and better operational efficiency.

K3 booked GBP9.2 million of extra costs in the period due to the review and impairments, compared to GBP1.1 million the 12 months before.

Trading since the period end has been encouraging, K3 said, and it remains confident it can make continued progress in the year ahead.

K3 shares were down 0.9% on Tuesday afternoon at 172.00p each.

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