TIDMKBT
RNS Number : 9817W
K3 Business Technology Group PLC
24 August 2022
AIM: KBT
24 August 2022
K3 BUSINESS TECHNOLOGY GROUP PLC
("K3" or "the Group" or "the Company")
Provider of business-critical software solutions focused on
fashion and apparel brands.
Interim results for the six months to 31 May 2022
Key Points
Financial
-- First half results from continuing operations in line with management expectations
-- Revenue from continuing operations of GBP19.9m (2021: GBP20.9m)
- recurring or predictable income (2) accounted for GBP14.7m or
74% of the total (2021: GBP14.8m or 71%)
-- Gross margin increased to 60% (2021: 58%), reflecting
increased margins in both units, K3 Products and Third-party
Solutions
-- Adjusted EBITDA (1) of GBP1.0m (2021: GBP0.9m)
-- Reported loss before tax from continuing operations of GBP2.8m (2021: GBP2.5m)
- this is after depreciation & amortisation, amortisation of
acquired intangibles, exceptional reorganisation and acquisition
costs, and share-based payment charges, which totalled GBP3.6m
(2021: GBP3.4m)
-- Adjusted loss per share(5) from continuing operations was
4.9p (2021: loss of 11.3p)/ Reported loss per share from continuing
operations earnings per share was 5.9p (2021: loss of 10.7p)
includes profit from discontinued activities
-- Net cash of GBP1.4m (2021: GBP4.4m). Financial year-end
position is expected to close significantly higher, reflecting
strong seasonal weighting of cash inflows
*2021 results have been restated following the classification of
K3 FDS Sage business as discontinued activities
Operational
-- Acquisition of ViJi, sustainability-focused software
developer, in January 2022 significantly broadened offering in
supply-chain transparency and traceability, increasing operational
investment by GBP0.2m
-- K3 Products:
- generated revenue of GBP6.5m and gross profit of GBP5.2m
(2021: GBP7.9m and GBP6.0m)
- gross margin increased to 80.2% from 76.4%, reflecting cost
reductions
- annualised revenue value from strategic products up 12% to
GBP4.3m
- contribution from legacy point-of-sale products continued to
decrease, as expected
- initiatives to enhance future channel partner sales and build
new revenues from USA
-- Third-party Solutions:
- generated revenue of GBP13.4m and gross profit of GBP6.7m
(2021: GBP13.0m and GBP6.1m)
- gross margin increased to 49.7% (2021: 46.9%), reflecting
better services chargeability, offshoring and higher licence and
maintenance income
- SYSPRO performed well and has established a good back-log and
new business pipeline
- Global Accounts continues to grow, with good visibility of
ongoing services work
-- Major IT system upgrade begun, expected to improve operational efficiency
-- Rebranding programme completed and new marketing initiatives
launched to support new strategy
Marco Vergani, Chief Executive Officer of K3 Business Technology
Group plc, said:
"We are executing against the new growth strategy that we
established in Q4 last year and have made encouraging progress in
the first half.
"K3 Products has clear growth opportunities in its fashion and
apparel markets and we are focusing on three critical areas for
customers - Sustainability, Omni-channel and Business Insights. The
acquisition of the Sustainability-focused software developer, ViJi,
in the period, will enhance our offering here.
"Third-party Solutions performed well and remains a significant
cash generator. We are investing in products and delivery resource
to support growth.
"The second half of the financial year is typically stronger
than the first, with substantial cash inflows due from software
licence and support and maintenance contract renewals. While there
are increasing macroeconomic uncertainties, we remain confident of
our long-term strategic direction and will continue to focus on
growth, cash and costs."
Enquiries:
K3 Business Technology Marco Vergani (CEO)
Group plc
www.k3btg.com Robert Price (CFO) T: 0161 876 4498
finnCap Limited Julian Blunt/ James Thompson T: 020 7220 0500
(NOMAD & Broker) (Corporate Finance)
Richard Chambers, Sunila De
Silva
(Corporate Broking)
KTZ Communications Katie Tzouliadis/ Dan Maloney T: 020 3178 6378
CHIEF EXECUTIVE OFFICER'S STATEMENT
Introduction
I am pleased to present K3's interim results for the six months
to 31 May 2022, a period in which the Group continued to make
progress in line with its new strategic growth plan, established in
the second half of the last financial year.
Against a backdrop of increasing macroeconomic uncertainties,
the Group's first half performance was in line with management
expectations. Revenue from continuing operations was GBP19.9m
(2021: GBP20.9m), gross margins improved, especially at K3
Products, and adjusted EBITDA was GBP1.0m (2021: GBP0.9m). Net cash
at 31 May 2022 stood at GBP1.4m, with the second half expected to
close significantly higher as cash inflows from software licence
and maintenance and support contract renewals, which fall due in
this period, come through.
As previously reported, our new strategic growth plan identified
opportunities across all core activities and has clearly defined
the Group's long-term vision, priorities, and objectives. We are
now executing against this plan, which will drive recurring
revenues. We are particularly focused on the development and growth
of our strategic products for the fashion and apparel markets, and
related large retail brands. Retail businesses in these markets are
contending with the need for profound digital transformation as
they adapt their models and systems to engage with customers and
suppliers in new and more agile ways. We see a substantial
opportunity in three critical areas; Sustainability (especially
supply chain traceability), Omni-channel and 'unified inventory'
(to create an integrated digital and physical shopping experience)
and Business Insights (to extract actionable intelligence from data
collected).
We are now integrating our fashion ERP solutions, K3|fashion and
K3|pebblestone, which are based on Microsoft Dynamics, with
K3|imagine, our 'headless' cloud commerce platform (which
integrates readily with any IT infrastructure) and K3|ViJi, a
strategic new software suite acquired in January 2022. This
integration programme adds further power to our solutions and
market positioning and enables us to offer customers a simple and
highly effective route to digital transformation in critical areas
of their businesses, driving their sustainability agenda and
providing a strong return on investment.
The acquisition of ViJi, the sustainability-focused software
developer, has added a compelling suite of products that addresses
supply chain transparency, significantly broadening our existing
Sustainability capabilities. Market interest in Sustainability
solutions is growing, driven both by consumer demands and emerging
legislation requiring brands to certify the origins and
manufacturing standards of their products.
As part of the ongoing development of the Group, we started a
major programme in the period to upgrade and unify our IT systems.
This will improve efficiencies and simplify operations. The
programme covers Finance, Sales, Customer Support, and Project
Management processes, and we expect it to be completed over the
next 12 months. In the first half, we also completed a rebranding
programme and launched new marketing initiatives, reflecting our
revised vision and strategy, which will further support K3's
position as a market leader in the fashion industry.
In January 2022, Microsoft named K3 as one of its key
Independent Software Vendors within the Microsoft Retail Cloud
Platform. This provides additional endorsement of our capabilities,
and we are deepening our existing collaboration with Microsoft to
generate demand and opportunities, as well as expanding our Channel
Partner Network. K3|fashion continues to be Microsoft's preferred
solution for the fashion and apparel vertical and K3 will be a
featured partner in Microsoft's FY23 partner investments and
incentives launch in October 2022.
While the conflict in Ukraine and global instability has created
greater uncertainty, the need for digital transformation remains a
high priority for our target sectors. Our products offer exciting
growth potential, and our expertise in the retail sector,
particularly in fashion, apparel & design, online, and
direct-to-consumer brands, is a significant strength.
Financial Results
Results from continuing operations
In the six months ended 31 May 2022, the Group generated total
revenue from continuing operations of GBP19.9m (2021: GBP20.9m),
with recurring or predictable revenue(2) accounting for GBP14.7m or
74% of the total (2021: GBP14.8m or 71%). Recurring revenue from
strategic products (i.e. SaaS and maintenance and support
income)(3) accounted for GBP1.3m of total revenue (2021:
GBP1.4m).
Gross margin increased to approximately 60% (2021: 58%),
reflecting improved gross margin in both K3 Products and
Third-party solutions. Gross profit for the period was GBP11.9m
(2021: GBP12.1m).
Reported administrative expenses decreased slightly to GBP14.3m
(2021: GBP14.5m) and underlying support/administrative expenses(6)
were also lower at GBP11.7m (2021: GBP12.0m). This was driven by
more focused product development resourcing and lower people costs,
mainly in the legacy support operations.
Adjusted EBITDA(1) from continuing activities increased to
GBP1.0m (2021: GBP0.9m), which also included a reduction of
capitalised development cost of c.GBP0.3m.
The reported loss before tax from continuing activities was
GBP2.8m (2021: GBP3.7m). This is after depreciation and
amortisation of GBP3.0m (2021: GBP3.8m), amortisation of acquired
intangibles of GBPnil (2021: GBP0.3m), exceptional reorganisation
costs of GBP0.1m (2021: income of GBP0.9m), acquisition costs of
GBP0.1m (2021: GBPnil) and share-based charges of GBP0.3m (2021:
GBP0.2m), which together amounted to GBP3.6m (2021: GBP3.4m).
The adjusted loss per share(5) from continuing operations was
4.9p (2021: 11.3p). This figure excludes depreciation and
amortisation, amortisation of acquired intangibles, exceptional
reorganisation costs, acquisition costs and share-based charges,
and is net of the related tax charge of GBP0.1m (2021: tax credit
GBP0.1m).
Reported loss per share from continuing operations reduced to
5.9p (2021: loss of 10.7p). Reported loss per share was 6.2p (2021:
earnings of 11.6p, which includes profit from discontinued
activities of Starcom and K3 FDS).
Balance sheet and cash flows
The Group's cash flow over the financial year remains heavily
weighted towards the second half. This reflects the significant
cash inflows from annual software licence and maintenance and
support renewals, with the largest element being SYSPRO renewals.
The SYSPRO renewal rate is typically c.98%.
The cash outflow from operations reduced to GBP5.2m (2021:
GBP7.4m), with the comparative period in 2021 including the profit
on disposal of the Starcom unit (GBP10.3m) and the removal of the
associated negative working capital balances of GBP0.5m. The profit
on disposal was updated between 31 May 2021 and 30 November 2021 by
an onerous contract adjustment of GBP1.1m. The comparative period
in 2021 also included GBP1.3m of repayments relating to coronavirus
tax deferment schemes. Finance expenses were substantially reduced
to GBP0.2m (2021: GBP1.2m) as a result of the equity conversion of
the GBP3.0m shareholder loan. The equity conversion incurred
GBP0.6m of costs, recognised in 2021.
Amortisation decreased to GBPnil (2021: GBP0.3m) following the
write-off of intangibles in the prior period.
Net cash used in investing activities amounted to GBP1.6m (2021:
inflow of GBP12.5m, which included a GBP13.8m net cash inflow from
the sale of businesses). This included spend on property, plant and
equipment of GBP0.4m (2021: GBPnil), which mainly related to the
unification of internal systems (2021: GBPnil), development
expenditure capitalised of GBP1.0m (2021: GBP1.3m) and ViJi
acquisition costs of GBP0.2m (2021: GBPnil).
Operational Review
The Group's results for the six months ended 31 May 2022,
together with comparatives for the same period in 2021, are
summarised in the tables below. The segmental analysis provides
further information on the key areas of activity, K3 Products and
Third-party Solutions.
2021 comparatives have been restated following the
classification of Starcom and the Sage reseller business as
discontinued activities.
Revenue Gross profit Gross margin
------------- ----------------------- ------------------- --------------------
2022 2021 (restated) 2022 2021 2022 2021
(restated) (restated)
------------- ----- ---------------- ----- ------------ ------ ------------
GBPm GBPm GBPm GBPm
K3 Products 6.5 7.9 5.2 6.0 80.0% 75.9%
Third-party
solutions 13.4 13.0 6.7 6.1 50%% 46.9%
------------- ----- ---------------- ----- ------------ ------ ------------
Total 19.9 20.9 11.9 12.1 59.8% 57.9%
------------- ----- ---------------- ----- ------------ ------ ------------
2022 2021
-------------------------------------- ----- -----
GBPm GBPm
Recurring or predictable revenue(2) 14.7 14.8
Recurring revenue from K3 strategic
products (SaaS, maintenance, annual
contracts and support) 1.3 1.4
-------------------------------------- ----- -----
K3 Products
K3 Products comprises:
-- K3 strategic products focused on fashion & apparel,
principally K3|fashion, K3|ViJi, K3|pebblestone and K3|imagine;
and
-- other stand-alone point solutions and apps, including our
legacy point-of-sale ("POS") products.
Revenue generated by K3 Products was GBP6.5m (2021: GBP7.9m).
This decrease mainly reflected revenue recognition of larger
multi-year deals in the last financial year as well as some deal
'lumpiness'. We are now moving to a trend of customers buying
annual software licences and progressively ramping up licence
procurement, thereby increasing overall licence sizes. Gross profit
was GBP5.2m (2021: GBP6.0m), and gross margin rose by 3.8
percentage points to 80.0% (2021: 75.9%), benefiting from a
reduction in the cost base.
The value of strategic products continues to grow, helped by
both new customer wins and existing customers taking more product.
The total annualised revenue value of software licences from
strategic products as at 31 May 2022 increased by 12% to GBP4.3m
(31 May 2021: GBP3.9m) and at 31 July 2022 annualised revenue value
stood at GBP4.9m. Just after the period end, in June 2022, the
largest annual recurring revenue contract for K3|fashion was
signed. Worth GBP0.2m annually, it was secured via our channel
partner network with an existing customer. It continues the trend
of larger licence contracts for this product and the trend for new
customers to initially buy a small number of licences and
subsequently acquire many more as the product is rolled out through
their business. We have focused additional resource on channel
partner management and, in particular, have expanded the commercial
team in North America. We believe there is scope to increase sales
of K3|fashion in this region to a significant percentage of the
overall total.
We are integrating our new Sustainability suite, K3|ViJi, with
our existing strategic products, and have also begun to offer it
selectively as a discrete product to prospects and clients. ViJi's
capabilities tap into growing demand, and we will continue to
develop its solution suite.
As expected, the contribution from the legacy point-of-sale
business reduced in the period, reflecting the legacy nature of
this product set, although the contribution from maintenance and
support contracts remained steady.
Third-party Solutions
Third-party Solutions comprises:
-- our SYSPRO activity, which is focused on the manufacturing and distribution sector; and
-- Global Accounts, which provides specialist services.
Revenue increased by 3% to GBP13.4m (2021: GBP13.0m) and gross
profit was 10% higher at GBP6.7m (2021: GBP6.1m), with gross margin
up by 3.1 percentage points to 50.0% (2021: 46.9%). The improvement
in gross margin was driven by a combination of better services
chargeability, offshoring, and increased licence and maintenance
income.
SYSPRO continued to perform well and has established a solid
contracted services back-log and a good pipeline of new business
opportunities, with larger deal sizes. We have continued to invest
in delivery resource and to develop intellectual property that
supplements and enhances SYSPRO functionality.
Global Accounts continued to grow, supporting five new Inter
IKEA Concept franchisee store openings in the six months to 31 May
2022. This included the first IKEA store in Oman and the largest
IKEA store globally in the Philippines. Visibility on future
activity is very good. We have recently completed the first IKEA
store opening in Chile with a new franchisee, as well as a second
store opening in Mexico. The revenue benefits are reflected in
increased licences and recurring revenue. We have also improved the
unit's gross margin through better utilisation and offshoring, and
are continuing to recruit to satisfy increasing demand.
Central Costs
Underlying support/administrative costs(6) decreased by 3% to
GBP10.9m (2021: GBP11.2m). This reflected lower people costs across
all segments. Including capitalised development, costs reduced by
5% to GBP11.9m (2021: GBP12.6m).
Outlook
K3 has a clear growth strategy for both K3 Products and
Third-party Solutions, and we are highly focused on the growth
opportunities we have identified across both segments, as well as
on cash generation and cost management. Once completed, the IT
upgrade programme will support operational efficiencies and
improved management processes.
Trading in June and July has been encouraging with a good level
of deal closures, ahead of the same period last year, across both
K3 Products and Third-party Solutions. Average software deal size
is increasing, and we are satisfied with the level of new business
opportunities in the Group's overall pipeline. There are attractive
potential deals at both K3 Products and Third-party Solutions. We
have also released new modules that support our strategic products.
While attrition in our non-core legacy products customer base will
continue, we are focused on providing a migration path to our
strategic products for key accounts.
There are uncertainties ahead, which means that it remains
prudent to be cautious about the rate and pace of deal closures.
Nonetheless, the opportunity for K3 Products to participate more
strongly in the fundamental shift under way in the retail sector,
driven by the rise of digital shopping, is exciting. Our strongly
cash-generative Third-party Solutions business has grown its
software sales, maintenance and support income, as well as its
order book, and we now expect the services revenue to grow
accordingly.
The second half of the financial year is seasonally our stronger
half, delivering high cash inflows from software licence and
maintenance and support contract renewals, and we expect this
weighting to be replicated this year.
Marco Vergani
Chief Executive Officer
Consolidated Income Statement
for the six months ended 31 May 2022
Restated^
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
GBP'000 GBP'000 GBP'000
Revenue 19,939 20,854 45,267
Cost of sales (8,047) (8,747) (18,432)
-------------------------------------- ------------ ----------- --------------
Gross profit 11,892 12,107 26,835
Administrative expenses (14,295) (14,514) (33,106)
Impairment losses on financial
assets (165) (125) (118)
-------------------------------------- ------------ ----------- --------------
Adjusted EBITDA 994 880 4,357
Depreciation and amortisation (3,024) (3,824) (6,797)
Amortisation of acquired intangibles - (284) (518)
Exceptional Impairment - - (1,421)
Exceptional reorganisation
costs (118) 881 (1,570)
Acquisition costs (98) - -
Share-based payment charge (322) (185) (440)
-------------------------------------- ------------ ----------- --------------
Loss from operations (2,568) (2,532) (6,389)
Finance expense (219) (1,167) (1,433)
Loss before taxation from
continuing operations (2,787) (3,699) (7,822)
Tax credit/(expense) 156 (951) (939)
Loss after taxation from continuing
operations (2,631) (4,650) (8,761)
(Loss)/profit after taxation
from discontinued operations (130) 9,689 12,292
(Loss)/profit for the period/year (2,761) 5,039 3,531
-------------------------------------- ------------ ----------- ----------------
^ The results for the 6 month period ended 31 May 2021 have been
restated to present K3 FDS Limited as discontinued operations.
All the loss for the year is attributable to equity shareholders
of the parent.
Note Restated^
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
(Loss)/profit per share
Basic and diluted earnings/(loss)
per share (6.2)p 11.6p 8.0p
Basic and diluted loss per
share from continuing operations (5.9)p (10.7)p (19.9)p
Adjusted earnings per share (4.9)p (11.3)p (13.8)p
Consolidated Statement of Comprehensive Income
for the six months ended 31 May 2022
Notes Restated^
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period/year (2,761) 5,039 3,531
----------------------------------------------- ------------ ----------- --------------
Other comprehensive income
Exchange differences on translation
of foreign operations 7 (842) (1,085)
----------------------------------------------- ------------ ----------- --------------
Total comprehensive income/(expense)
for the period/year (2,754) 4,197 2,446
----------------------------------------------- ------------ ----------- --------------
All the total comprehensive income/(expense) is attributable to
equity holders of the parent. All the other comprehensive
income/(expense) will be reclassified subsequently to profit or
loss when specific conditions are met. None of the items within
other comprehensive income/(expense) had a tax impact.
Consolidated Statement of Financial
Position
as at 31 May 2022 Restated Audited
Unaudited Unaudited as at 30
as at 31 as at 31 November
Notes May 2022 May 2021 2021
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 1,661 1,629 1,551
Right-of-use assets 1,098 1,851 1,709
Goodwill 25,475 25,733 24,772
Other intangible assets 5,902 8,408 6,648
Deferred tax assets 1,010 681 1,010
Total non-current assets 35,146 38,302 35,690
----------------------- ----------- -----------
Current assets
Stock 448 497 467
Trade and other receivables 11,742 10,387 10,605
Cash and cash equivalents 4,322 6,295 9,146
Total current assets 16,512 17,179 20,218
----------------------- ----------- -----------
Total assets 51,658 55,481 55,908
----------------------- ----------- -----------
LIABILITIES
Non-current liabilities
Lease liabilities 223 926 135
Provisions 783 472 1,129
Deferred tax liabilities 1,288 925 1,288
----------------------- ----------- -----------
Total non-current liabilities 2,294 2,323 2,552
----------------------- ----------- -----------
Current liabilities
Trade and other payables 10,610 11,318 14,456
Current tax liabilities 632 1,577 509
Lease liabilities 951 943 1,623
Borrowings 2,949 1,901 113
Provisions 854 122 854
Total current liabilities 15,996 15,861 17,555
----------------------- ----------- -----------
Total liabilities 18,290 18,184 20,107
----------------------- ----------- -----------
EQUITY
Share capital 11,183 11,183 11,183
Share premium account 31,451 31,451 31,451
Other reserves 11,151 11,151 11,151
Translation reserve 1,545 1,781 1,538
Accumulated losses (21,962) (18,269) (19,522)
----------------------- ----------- -----------
Total equity attributable to equity
holders of the parent 33,368 37,297 35,801
----------------------- ----------- -----------
Total equity and liabilities 51,658 55,481 55,908
----------------------- ----------- -----------
Consolidated Cash Flow Statement
for the six months ended 31 May 2022
Restated^
Unaudited Unaudited Audited
6 months 6 months 12 months to
to 31 May to 31 May 30 November
2022 2021 2021
Notes GBP'000 GBP'000 GBP'000
Cash flows from operating activities
--------------------------------------------------------------- ------ ------------ ----------- ---------------
(Loss)/profit for the period (2,761) 5,039 3,531
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Adjustments for:
Finance expense 219 1,160 1,448
Tax (income)/expense (156) 841 829
Depreciation of property, plant and equipment 300 268 591
Depreciation of right-of-use assets 678 869 963
Amortisation of intangible assets and development expenditure 2,060 3,219 5,639
Impairment of intangible assets - - 1,421
Loss on sale of property, plant and equipment - - 466
Share-based payments charge 322 185 440
Profit on disposal of discontinued operations, net of tax - (10,314) (11,893)
(Decrease)/increase in provisions (346) 169 1,558
(Increase)/decrease in trade and other receivables (1,087) 1,062 (242)
(Decrease) in trade and other payables (4,658) (9,863) (3,896)
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Cash (used in)/generated from operations (5,429) (7,365) 855
Income taxes 279 (38) (1,362)
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Net cash (used in)/generated from operating activities (5,150) (7,403) (507)
Cash flows from investing activities
Net cash flow arising on the sale of businesses - 13,795 14,762
Acquisition of subsidiary (180) - -
Development expenditure capitalised (1,013) (1,330) (3,024)
Purchase of property, plant and equipment (410) - (623)
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Net cash (used in)/from investing activities (1,603) 12,465 11,115
Cash flows from financing activities
Proceeds from loans and borrowings 1,500 - 4,800
Issue of shares - 3,000 -
Repayment of loans and borrowings (83) (9,253) (11,571)
Repayment of lease liabilities (584) (791) (1,187)
Interest paid on lease liabilities (96) (131) (202)
Finance expense paid (26) (1,051) (673)
Net cash (used in)/from financing activities 711 (8,226) (8,833)
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Net change in cash and cash equivalents (6,042) (3,164) 1,775
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Cash and cash equivalents at start of period/year 9,033 7,566 7,566
Exchange losses on cash and cash equivalents (64) (8) (308)
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Cash and cash equivalents at end of period/year 2,927 4,394 9,033
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Cash and cash equivalents 4,322 6,295 9,146
Bank overdrafts (secured) 8 (1,395) (1,901) (113)
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Net cash and cash equivalents 2,927 4,394 9,033
--------------------------------------------------------------- ------ ------------ ----------- ---------------
Consolidated Statement of Changes in Equity
for the period ended 31 May 2022
Translation Accumulated
Share capital Share premium Other reserves reserve earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 December 2020 10,737 28,897 11,151 2,623 (23,493) 29,915
------------------- -------------- -------------- --------------- --------------- -------------- -------------
Changes in equity -
for the six
months ended 31
May 2021
Profit for the
period - - - - 5,039 5,039
Other
comprehensive
expense for the
period - - - (842) - (842)
------------------- -------------- -------------- --------------- --------------- -------------- -------------
Total
comprehensive
income/(expense) - - - (842) 5,039 4,197
Share based
payment - - - - 185 185
Issue of shares 446 2,554 - - - 3,000
------------------- -------------- -------------- --------------- --------------- -------------- -------------
At 31 May 2021 11,183 31,451 11,151 1,781 (18,269) 37,297
------------------- -------------- -------------- --------------- --------------- -------------- -------------
Changes in equity
for year ended 30
November 2021
Loss for the year - - - - (1,508) (1,508)
Other
comprehensive
expense for the
year - - - (243) - (243)
------------------- -------------- -------------- --------------- --------------- -------------- -------------
Total
comprehensive
income/(expense) - - - (243) (1,508) (1,751)
Share based
payment - - - - 255 255
At 30 November
2021 11,183 31,451 11,151 1,538 (19,523) 35,800
------------------- -------------- -------------- --------------- --------------- -------------- -------------
Changes in equity -
for six months
ended 31 May 2022
Loss for the
period - - - - (2,761) (2,761)
Other
comprehensive
income for the
period - - - 7 - 7
------------------- -------------- -------------- --------------- --------------- -------------- -------------
Total
comprehensive
expense - - - 7 (2,761) (2,754)
Share based
payment - - - - 322 322
------------------- -------------- -------------- --------------- --------------- -------------- -------------
At 31 May 2022 11,183 31,451 11,151 1,545 (21,962) 33,368
------------------- -------------- -------------- --------------- --------------- -------------- -------------
1 Segment information
For the six months ended 31 May 2022
K3 Products Third-party solutions Central Costs Total
GBP'000 GBP'000 GBP'000 GBP'000
Total segment revenue 8,676 14,785 - 23,461
Less Inter-segment revenue (2,186) (1,337) - (3,523)
Software licence revenue 836 1,801 - 2,637
Services revenue 415 8,019 - 8,434
Maintenance & support 4,834 3,614 - 8,448
Hardware and other revenue 406 14 - 420
External revenue 6,491 13,448 - 19,939
Cost of sales (1,287) (6,760) - (8,047)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Gross profit 5,204 6,688 - 11,892
Gross margin 80.2% 49.7% - 59.6%
----------------------------------------------- ------------ ---------------------- -------------- ---------
Underlying Administrative expenses(7) (4,617) (3,482) (2,799) (10,898)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Adjusted EBITDA(1) from continuing operations 587 3,206 (2,799) 994
----------------------------------------------- ------------ ---------------------- -------------- ---------
Depreciation and amortisation - - (3,024) (3,024)
Exceptional reorganisation costs - - (118) (118)
Acquisition costs - - (98) (98)
Share-based payment charge - - (322) (322)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Loss from operations 587 3,206 (6,361) (2,568)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Finance expense - - (219) (219)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Loss before tax and discontinued operations 587 3,206 (6,580) (2,787)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Tax credit - - 156 156
Loss from discontinued operations - - (130) (130)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Profit/(loss) for the year 587 3,206 (6,554) (2,761)
----------------------------------------------- ------------ ---------------------- -------------- ---------
For the six months ended 31 May 2021
K3 Products Third-party solutions Central Costs Total
GBP'000 GBP'000 GBP'000 GBP'000
Total segment revenue 10,605 14,026 - 24,631
Less Inter-segment revenue (2,722) (1,055) - (3,777)
Software licence revenue 1,878 1,614 - 3,492
Services revenue 553 8,060 - 8,613
Maintenance & support 4,879 3,256 - 8,135
Hardware and other revenue 573 41 - 614
External revenue 7,883 12,971 - 20,854
Cost of sales (1,860) (6,887) - (8,747)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Gross profit 6,023 6,084 - 12,107
Gross margin 76.4% 46.9% - 58.1%
----------------------------------------------- ------------ ---------------------- -------------- ---------
Underlying Administrative expenses(7) (4,845) (3,396) (2,986) (11,227)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Adjusted EBITDA(1) from continuing operations 1,178 2,688 (2,986) 880
----------------------------------------------- ------------ ---------------------- -------------- ---------
Depreciation and amortisation - - (3,824) (3,824)
Amortisation of acquired intangibles - - (284) (284)
Exceptional reorganisation costs - - (185) (185)
Share-based payment charge - - (185) (185)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Loss from operations 1,178 2,688 (6,398) (2,532)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Finance expense - - (1,167) (1,167)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Loss before tax and discontinued operations 1,178 2,688 (7,565) (3,699)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Tax expense - - (951) (951)
Profit from discontinued operations - - 9,689 9,689
----------------------------------------------- ------------ ---------------------- -------------- ---------
Profit for the year 1,178 2,688 1,173 5,039
----------------------------------------------- ------------ ---------------------- -------------- ---------
For the twelve months ended 30 November 2021
K3 Products Third-party solutions Central Costs Total
GBP'000 GBP'000 GBP'000 GBP'000
Total segment revenue 20,297 32,613 - 52,910
Less inter-segment revenue (5,512) (2,131) - (7,643)
Software licence revenue 3,316 3,325 - 6,641
Services revenue 1,048 16,277 - 17,325
Maintenance & support 9,091 10,777 - 19,868
Hardware and other revenue 1,331 102 - 1,433
External revenue 14,786 30,482 - 45,267
Cost of sales (3,653) (14,780) - (18,432)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Gross profit 11,133 15,702 - 26,835
Gross margin 75.3% 51.5% - 59.3%
----------------------------------------------- ------------ ---------------------- -------------- ---------
Underlying Administrative expenses(7) (9,922) (6,628) (5,928) (22,478)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Adjusted EBITDA(1) from continuing operations 1,211 9,074 (5,928) 4,357
----------------------------------------------- ------------ ---------------------- -------------- ---------
Depreciation and amortisation - - (6,797) (6,797)
Amortisation of acquired intangibles - - (518) (518)
Exceptional impairment - - (1,421) (1,421)
Exceptional reorganisation costs - - (1,570) (1,570)
Share-based payment charge - - (440) (440)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Loss from operations 1,211 9,074 (16,674) (6,389)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Finance expense - - (1,433) (1,433)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Loss before tax and discontinued operations 1,211 9,074 (18,107) (7,822)
----------------------------------------------- ------------ ---------------------- -------------- ---------
Tax expense - - (939) (939)
Profit from discontinued operations - - 12,292 12,292
----------------------------------------------- ------------ ---------------------- -------------- ---------
Profit for the year 1,211 9,074 (6,754) 3,531
----------------------------------------------- ------------ ---------------------- -------------- ---------
2 General information
K3 Business Technology Group Plc is incorporated in England and
Wales under the Companies Act (listed on AIM, a market operated by
the London Stock Exchange Plc) with the registered number 2641001.
The address of the registered office is Baltimore House, 50 Kansas
Avenue, Manchester M50 2GL.
The interim condensed consolidated financial statements comprise
the company and its subsidiaries, "the Group".
3 Basis of preparation and Going Concern
The financial information set out in this Interim Report does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 30 November 2021, prepared in accordance with the
international accounting standards in conformity with the
requirements of the Companies Act 2006, have been filed with the
Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
Section 498 (2) or (3) of the Companies Act 2006. The interim
financial information has been prepared in accordance with the
recognition and measurement principles of International Financial
Reporting Standards ("IFRS") and on the same basis and using the
same accounting policies as used in the financial statements for
the year ended 30 November 2021.
The financial information has not been prepared (and is not
required to be prepared) in accordance with IAS 34. The accounting
policies have been applied consistently throughout the Group for
the purposes of preparation of this financial information.
The Interim Report has not been audited or reviewed in
accordance with the International Standard on Review Engagement
2410 issued by the Auditing Practices Board.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. For these reasons, they continue to adopt the
going concern basis of accounting in preparing this financial
information.
4 Significant events
On 27 January 2022, K3 acquired the French sustainability
start-up, ViJi SAS. ViJi's products enable brands to trace and
authenticate more easily and reliably with the environmental and
social credentials of their supply chains. This includes the
collection, verification and renewals of supplier certifications.
The software also has a consumer-facing component, enabling the
digital communication of information on the ethical history of
items, including materials, manufacturing processes and
sustainability.
On 9 February 2022, the Group granted a further 80,000 Market
Prices Share Options and a further 175,000 new Nominal Priced
Options to certain PDMRs.
On 11 February 2022, the Group agreed an extension to its
Current Revolving Credit Facility with Barclays for GBP3.5m until
31 March 2023.
On 18 May 2022, 500,000 Market Priced Options and 175,000
Nominal Priced Options were issued to certain PDMRs and employees
of the Group.
In May 2022, Jonathan Manley (non-executive director) retired by
rotation at the Annual General meeting.
5 ViJi acquisition
On 27 January 2022, K3 purchased 100% of the share capital of
ViJi, an innovative software developer with an exciting suite of
products focused on sustainability. Based in south-west France,
ViJi developed fully scalable software solutions that support the
sustainability objectives and strategies of fashion retailers.
The strategic acquisition will complement K3's refocused growth
strategy and international customer base as we continue to
transform fashion, apparel and select retail markets for good.
Details of the fair value of identifiable assets and liabilities
acquired, purchase consideration and goodwill are as follows:
Fair Value
GBP'000
Development Costs 53
Other intangibles assets 250
Property, plant and equipment 2
Accounts receivables 35
Cash 30
Bank loans (138)
Trade and other payables (35)
Net Assets 197
===========
Fair value of consideration paid GBP'000
Cash on completion 210
Deferred consideration 84
Contingent consideration 588
882
===========
Goodwill 685
===========
Net cash outflow arising on acquisition
Cash consideration 210
Less: cash and cash equivalent
balances acquired (30)
180
-----------
Acquisition costs of GBP98k arose as a result of the
transaction. These have been recognised as part of exceptional
administrative expenses in the statement of comprehensive
income.
The deferred consideration of GBP84k (EUR100k), is to be paid in
Cash on the anniversary of the closing date, Contingent
consideration capped at GBP588k (EUR700k) will be paid as an
earn-out in respect of achievement of measures during financial
years 2023 and 2024.
6 Discontinued operations
On 26 February 2021, the Group announced that a sale of the
Starcom business for consideration of GBP14.7m had been approved
and completed. Starcom had already been classified as a
discontinued operation in the prior year as it represented a major
line of business for the Group.
The post-tax gain on disposal of the Starcom business was
determined as follows:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 to 31 May to
May 2021 30 November
2022 2021
GBP'000 GBP'000 GBP'000
Cash consideration received - 14,474 14,474
----------
Total consideration received - 14,747 14,747
---------- ----------- -------------
Cash disposed of - (1,375) (1,375)
----------
Net cash inflow on disposal
of discontinued operations - 13,372 13,372
----------
Net assets disposed (other
than cash)
Property, plant and equipment - (199) (199)
Intangibles - (3,015) (3,015)
Right of use asset - (454) (454)
Trade and other receivables - (2,404) (2,404)
Trade and other payables - 1,958 1,958
---------- ----------- -------------
- (4,114) (4,114)
---------------------------------------------- ----------- -------------
Pre-tax gain on disposal of
discontinued operations - 9,258 9,258
Related tax expense - - -
-----------
Gain on disposal of discontinued
operations - 9,258 9,258
---------- ----------- -------------
Trade and other payables includes an onerous contract provision
of GBP1,125k relating to higher than market pricing on the 3 year
post completion service agreement with the buyer.
The results of the Starcom business for the year are presented
below:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 to 31 May to
May 2021 30 November
2022 2021
GBP'000 GBP'000 GBP'000
Total Revenue - 2,309 2,309
Less inter-segment revenue - - -
--------------------------------------- ----------- ----------- -------------
External revenue - 2,309 2,309
Cost of sales - (845) (845)
---------------------------------------- ---------- ----------- -------------
Gross profit - 1,464 1,464
Administrative expenses - (1,011) (1,011)
Impairment losses on financial - - -
assets
Amortisation of acquired intangibles - (99) (107)
Profit from operations - 354 346
Profit on disposal - 9,258 9,258
Finance credit - 9 9
---------------------------------------- ---------- ----------- -------------
Profit before taxation from
discontinued operations - 9,621 9,613
---------------------------------------- ---------- ----------- -------------
Tax credit including on gain
on asset held for sale - 110 110
Profit for the year from discontinued
operations - 9,731 9,723
---------------------------------------- ----------- ----------- -------------
Basic and diluted profit per share
from discontinued operations (pence
per share) - 24.8 2.6
---------------------------------------- ----------- ----------- -------------
The net cashflows incurred by Starcom are as follows:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
GBP'000 GBP'000 GBP'000
Operating - 379 628
Investing - - (129)
Financing - 12,835 (157)
------------ ----------- -------------
Net cash inflow - 13,214 342
------------ ----------- -------------
On 20 September 2021, the Group disposed of the customers and
employees of its Sage business to Pinnacle Computing (Support) Ltd
for GBP1.68m.
Formal completion occurred in early October 2021, following a
TUPE consultation process in respect of the transfer to Pinnacle of
the employees, and the disposal consideration was subject to a
downward adjustment of GBP0.2m in respect of restructuring costs
that Pinnacle undertook immediately following completion. The Group
maintained ownership of the sales ledger at Completion which was
GBP0.1m at 30 November 2021.
The post-tax gain on disposal of the Sage business was
determined as follows:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
GBP'000 GBP'000 GBP'000
Cash consideration received - - 1,475
------------
Total consideration received - - 1,475
------------ ----------- -------------
Cash disposed of - - -
------------
Net cash inflow on disposal
of discontinued operations - - 1,475
------------
Net assets disposed (other
than cash)
Trade and other receivables - - 682
Trade and other payables - - 478
------------ ----------- -------------
- - 1,160
------------ ----------------------------------------------- -------------
Pre-tax gain on disposal of
discontinued operations - - 2,635
Related tax expense - - -
------------
Gain on disposal of discontinued
operations - - 2,635
------------ ----------- -------------
Trade and other payables includes the release of working capital
accruals no longer payable following the disposal of the
business.
The results of the Sage business for the year are presented
below:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
GBP'000 GBP'000
External revenue (46) 2,391 4,011
Cost of sales (2) (1,425) (2,437)
------------------------------------------ ----------- ----------- -------------
Gross (loss)/profit (48) 966 1,574
(82) (995) (1,641)
Administrative expenses (1) (5) 31
Impairment losses on financial
assets (130) (34) (36)
(Loss)/profit from operations (47) 966 1,574
Disposal (costs)/profit - (6) 2,629
Finance credit/(expense) 1 (2) (24)
------------------------------------------ ----------- ----------- -------------
Profit before taxation from
discontinued operations (130) (42) 2,569
------------------------------------------ ----------- ----------- -------------
Tax credit /(charge) including
on gain on asset held for
sale - - -
----------------------------------------- ----------- ----------- -------------
(Loss)/profit for the year from
discontinued operations (130) (42) 2,569
------------------------------------------ ----------- ----------- -------------
Basic and diluted (loss)/profit
per share from discontinued operations
(pence per share) (0.3) (0.1) 5.8
------------------------------------------ ----------- ----------- -------------
The amounts included in the consolidated cashflows related to
the Sage business are as follows:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
GBP'000 GBP'000 GBP'000
Operating (131) (34) (230)
Investing - - -
Financing 1 (2) -
----------- ----------- -------------
Net cash outflow (130) (36) (230)
----------- ----------- -------------
7 (Loss)/earnings per share
The calculations of (loss)/earnings per share (EPS) are based on
the profit/(loss) for the period and the following numbers of
shares:
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
Denominator GBP'000 GBP'000 GBP'000
Weighted average number of
shares used in basic and diluted
EPS 44,705,570 43,602,052 44,090,074
Certain employee options and warrants have not been included in
the calculation of diluted EPS because their exercise is contingent
on the satisfaction of certain criteria that had not been met at
the end of the period/year.
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
GBP'000 GBP'000 GBP'000
Loss after tax from continuing operations (2,631) (4,650) (8,761)
Profit after tax from discontinued
operations 130 9,689 12,292
----------- ----------- -------------
(Loss)/profit attributable to ordinary
equity holders of the parent for
basic and diluted earnings per share (2,501) 5,038 3,531
----------- ----------- -------------
The alternative earnings per share calculations have been
computed because the directors consider that they are useful to
shareholders and investors. These are based on the following
profits/(losses) and the above number of shares.
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
GBP'000 GBP'000 GBP'000
Loss after tax from continuing operations (2,631) (4,650) (8,761)
Add back Other Items:
Amortisation of acquired intangibles (0) 284 518
Exceptional reorganisation costs 118 (881) 1,605
Exceptional impairment costs - - 1,421
Acquisition costs 98 - -
Shared-based payment charge 322 185 440
Tax (credit)/charge related to Other
Items (102) 132 (1,291)
Loss attributable to ordinary equity
holders of the parent for basic and
diluted earnings per share from continuing
operations before other items (2,195) (4,931) (6,068)
----------- ----------- ---------------
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 May to 31 May to
2022 2021 30 November
2021
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ----------- -------------
(Loss)/profit per share
Basic and diluted loss per share (6.2) 11.6 8.0
Basic and diluted (loss)/profit per
share from continuing operations (5.9) (10.7) (19.9)
(0.3) 22.3 27.9
------------------------------------- ----------- ----------- -------------
Adjusted loss per share
Basic and diluted loss per share
from continuing operations before
other items (4.9) (11.3) (13.8)
------------------------------------- ----------- ----------- -------------
8 Loans and borrowings
Unaudited Audited
Unaudited as at as at 30
as at 31 31 November
May 2022 May 2021 2021
GBP'000 GBP'000 GBP'000
Current
Bank overdrafts (secured) 1,395 1,901 113
Bank loans (secured) 1,555 - -
2,950 1,901 113
--------------------- ---------- ----------
9 Net debt
Unaudited Audited
Unaudited as at as at 30
as at 31 31 November
May 2022 May 2021 2021
GBP'000 GBP'000 GBP'000
Loans and borrowings (2,949) (1,901) (113)
Cash 4,322 6,295 9,146
--------------------- ---------- ----------
Net cash (before leases) 1,373 4,394 9,033
--------------------- ---------- ----------
Non-current leases liabilities (223) (926) (135)
Current lease liabilities (951) (943) (1,623)
--------------------- ---------- ----------
Net Cash 199 2,525 7,275
--------------------- ---------- ----------
10 Trade and other payables
Unaudited Audited
Unaudited as at as at 30
as at 31 31 November
May 2022 May 2021 2021
GBP'000 GBP'000 GBP'000
Trade payables 2,432 2,144 2,330
Other payables 1,437 1,100 704
Accruals 2,539 2,391 5,354
--------------------- ---------- ----------
Total financial Liabilities, excluding
loans and borrowings, classified
as financial liabilities measures
at amortised cost 6,408 5,635 8,388
Other tax and social security
tax 1,181 2,163 2,704
Contract liabilities 3,021 3,520 3,364
10,610 11,318 14,456
--------------------- ---------- ----------
11 Trade and other receivables
Unaudited Audited
Unaudited as at as at 30
as at 31 31 November
May 2022 May 2021 2021
GBP'000 GBP'000 GBP'000
Trade receivables 7,797 7,149 7,407
Loss allowance (726) (1,089) (852)
--------------------- ---------- ----------
Trade receivables - net 7,071 6,060 6,555
Other receivables 172 128 122
Contract assets 3,423 3,009 3,077
Prepayments 1,076 1,190 851
11,742 10,387 10,605
--------------------- ---------- ----------
12 Tax
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31 to 31 May to
May 2021 30 November
2022 2021
GBP'000 GBP'000 GBP'000
Current tax (credit)/expense
Income tax of overseas operations
on (losses)/profits for the period/year (156) 662 676
Adjustment in respect of prior
periods - - (80)
--------------------- ----------- -------------
Total current tax (credit)/expense (156) 662 596
--------------------- ----------- -------------
Deferred tax (income)/expense
Origination and reversal of temporary
differences - (272) 233
Adjustment in respect of prior
periods - 451 -
--------------------- ----------- -------------
Total deferred tax expense - 179 233
--------------------- ----------- -------------
Total tax (credit)/expense (156) 841 829
--------------------- ----------- -------------
Income tax (credit)/expense attributable
to continuing operations (156) 951 939
Income tax credit attributable
to discontinued operations - (110) (110)
--------------------- ----------- -------------
(156) 841 829
--------------------- ----------- -------------
13 Non-statutory information
The Group uses a variety of alternative performance measures,
which are non-IFRS, to assess the performance of its operations.
The Group considers these performance measures to provide useful
historical financial information to help investors evaluate the
underlying performance of the business.
These measures, as described below, are used to improve the
comparability of information between reporting periods and
geographical units, to adjust for exceptional items or to adjust
for businesses identified as discontinued to provide information on
the ongoing activities of the Group. This also reflects how the
business is managed and measured on a day-to-day basis.
1 Adjusted EBITDA - is the loss from continuing activities
adjusted to exclude depreciation and amortisation of development
costs GBP3.0m (May 2021: GBP3.8m, Nov 2021: GBP6.8m), amortisation
of acquired intangibles GBPnil (May 2021: GBP0.3m, Nov 2021
GBP0.5m), exceptional impairment costs GBPnil (May 2021 GBPnil, Nov
2021 GBP1.4m) exceptional reorganisation costs GBP0.1m (May 2021:
GBP0.8m income, Nov 2021 GBP1.6m), acquisition costs GBP0.1m (May
2021: GBPnil, Nov 2021: GBPnil), and share-based charges GBP0.3m
(May 2021: GBP0.2m, Nov 2021 GBP0.4m).
2 Recurring or predictable revenue - Contracted support,
maintenance and services revenues with a framework agreement of 2
years or more.
3 Strategic SaaS, maintenance and support - maintenance and
support revenue for Strategic IP within K3 products.
4 Net cash/debt comprises Bank Loans, Shareholder Loans and
Overdrafts less Cash and cash equivalents, including Cash and cash
equivalents held for sale.
5 Adjusted loss/earnings per share - basic loss per share from
continuing operations adjusted to exclude amortisation of acquired
intangibles GBPnil (May 2021: GBP0.3m, Nov 2021 GBP0.5m),
exceptional impairment costs GBPnil (May 2021 GBPnil, Nov 2021
GBP1.4m) exceptional reorganisation costs GBP0.1m (May 2021:
GBP0.8m income, Nov 2021 GBP1.6m), acquisition costs GBP0.1m (May
2021: GBPnil, Nov 2021: GBPnil), and share-based charges GBP0.3m
(May 2021: GBP0.2m, Nov 2021 GBP0.4m) net of the related tax charge
GBP0.1m (May 2021 GBP0.1m credit, Nov 2021 GBP1.3m).
6 Underlying support/admin costs - administrative expenses
adjusted to exclude depreciation and amortisation of development
costs GBP3.0m (May 2021: GBP3.8m, Nov 2021: GBP6.8m), amortisation
of acquired intangibles GBPnil (May 2021: GBP0.3m, Nov 2021
GBP0.5m), exceptional impairment costs GBPnil (May 2021 GBPnil, Nov
2021 GBP1.4m) exceptional reorganisation costs GBP0.1m (May 2021:
GBP0.8m income, Nov 2021 GBP1.6m), acquisition costs GBP0.1m (May
2021: GBPnil, Nov 2021: GBPnil), and share-based charges GBP0.3m
(May 2021: GBP0.2m, Nov 2021 GBP0.4m).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
IR FLFVRTEIVFIF
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