17th Sep 2013 08:02
LONDON (Alliance News) - K3 Business Technology Group PLC reported a drop in full-year profits, due to GBP3.6 million in development costs during the period, and lower full-year revenues following a period of weaker performance by its Microsoft UK division.
The IT solutions supplier to the supply chain industry maintained its full-year dividend at 1.0 pence, and said that it expects a better trading performance in the new financial year.
The company reported a 7% fall in full-year revenues to GBP63.5 million, compared with GBP67.9 million a year earlier, attributed to a weaker performance in its Microsoft UK division.
K3 Business Technology reported a net profit of GBP1.2 million in the 12 months to June 30, compared to GBP5.7 million a year earlier, due to significant development costs.
It said that development costs reached GBP3.6 million, including GBP1.45 million in costs related to investment in its Gemstone Project, to develop a new global Microsoft AX solution for the retail market. K3 also reported GBP0.73 million in exceptional costs, related to reorganisation costs of the company.
The group said it gained a number of major new order wins worth GBP11.56 million during the year, 70% of which were signed in the second half of the year, and mostly in the fourth quarter.
K3 Business Technology said that its Microsoft UK division secured a number of initial order wins with some high profile retailers for the first release of its Gemstone solution, profits from which it expects will reach balance sheets in the new financial year.
It said it saw a strong performance from its SYSPRO and Sage division, with sales of GBP25.4 million in the year, and said that it expects new products to help drive demand in the new financial year. It also said that its international division saw sales of GBP12.9 million, due to a slowdown in the Dutch retail market, and the phasing of IKEA growth plans, but said it expects the division to benefit from stronger demand in the new fiscal year.
The company said that it reduced its net debt by 12% to GBP13.8 million as of June 30, compared with GBP15.7 million a year earlier, after a net share placing of GBP2.6 million. The company added that cash generated from operations in the year, remained strong at GBP8.0 million.
K3 Business Technology shares were trading 2.7% or 3.50 pence higher after the open Tuesday, at 133.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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