K3 Business Technology Group PLC Trading update (6236Q)
October 22 2019 - 2:00AM
UK Regulatory
TIDMKBT
RNS Number : 6236Q
K3 Business Technology Group PLC
22 October 2019
22 October 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, announces the following update on
current trading for the financial year ending 30 November 2019.
The second half of the financial year started confidently, with
an encouraging pipeline of both major new deals and high-margin
'follow--on' software licence orders. However a major new contract
in the final process of agreement has now been put on hold by the
counterparty and a large customer has entered into administration.
In addition, certain customers are choosing to purchase additional
software licence tranches at a slower pace than anticipated. As a
result of these factors, management now expects that results for
the year will be significantly below current market expectations.
While there are important trading weeks remaining during the
current financial year, in light of these softer trading
conditions, management has taken a cautious view of the outcome for
the financial year, and currently estimates that the Group's
adjusted operating profit for the year will be approximately
GBP1.5m. The Company's net debt position at the year end is
anticipated to be GBP2.2m. A final (and total) dividend for the
year, in line with existing guidance, is expected to be proposed
with the publication of final results.
Notwithstanding the reduced financial performance expected this
year, the Company has continued to make encouraging strategic and
operational progress. In the second half, K3 was included in
Microsoft's top 20 Independent Software Vendors ("ISV") globally,
with 'K3 I fashion' selected as Microsoft's recommended solution
for the fashion vertical. This strong validation stands K3 in very
good stead in its markets and the pipeline for this product remains
strong and high quality.
Management also remains very encouraged by the potential of 'K3
I imagine', the Group's new, cutting--edge solution launched a year
ago. It has made good progress to date, especially in the new
self--serve vertical, and is expected to make a meaningful
contribution to revenue in the current financial year. It also has
good momentum for next year across both the Group's existing
customer base and with new customers.
In other strategic areas, Global Accounts continued to deliver
good growth and K3 joined the Sage UK Developer Partner Programme
as a Platinum Partner, the highest level available. In addition, K3
has developed the first Sage--specific hosted platform that has
been endorsed by Sage, which provides the Group with a new route to
market for its own hosted technologies.
Looking into the next financial year and beyond therefore, the
Board is optimistic of the Company generating much improved levels
of profitability and cash generation.
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
Group plc CEO (today)
www.k3btg.com Robert Price, CFO Thereafter 0161
876 4498
finnCap Limited Julian Blunt/ James T: 020 7220 0500
(Nominated adviser Thompson (Corporate
and Broker) Finance)
Camille Gochez (Corporate
Broking)
KTZ Communications Katie Tzouliadis/ Dan T: 020 3178 6378
Mahoney
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END
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