Trading Update

16 May 2017

AIM: KBT

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014

K3 Business Technology Group plc

("K3", "the Company" or "Group")

Trading update

K3, which provides mission critical software, cloud solutions and managed services to the retail, manufacturing and distribution sectors, provides the following update on current trading.

As previously reported, half year results were impacted by Enterprise contract slippages and, although the Company has seen some major deals close, certain large Enterprise contracts have not been secured as expected. As a result, despite the high seasonality inherent in Q4 trading, the Board now believes that the results for the year to 30 June 2017 will be significantly below current market expectations. Nonetheless, the Group's operations elsewhere are seeing encouraging progress and healthy cashflows. Furthermore, the Company has secured pilot customers for its new cloud-based modular technologies which will generate opportunities for both new and existing customers.

Given trading conditions and the Group's performance to date, the Board has started a review of the Company's resources with the intention of refocusing the growth strategy around the cash generating business units and the large installed customer base. A further update on this will be provided in due course.

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