K3 Business Technology Group PLC Trading Update (0165Z)
12 December 2017 - 6:00PM
UK Regulatory
TIDMKBT
RNS Number : 0165Z
K3 Business Technology Group PLC
12 December 2017
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014
12 December 2017
AIM: KBT
K3 BUSINESS TECHNOLOGY GROUP PLC
("K3" or "the Group" or "the Company")
Trading update
&
Results of operational resource review
K3, which provides mission-critical business software, cloud
solutions and managed services to the retail, manufacturing and
distribution sectors, is pleased to provide an update on trading
for the 17 month period to 30 November 2017, and the results of its
operational resource review.
The Board of K3 is pleased to confirm that trading over the
remainder of the financial period to 30 November 2017 has been in
line with management expectations. New customers signed since the
30 June 2017 included Barratts, Eton Shirts, Lifestyle Sports and
Littlewoods, and there was encouraging growth in the Global
Accounts division. Consequently, results for the period are
anticipated to be in line with management expectations. Net debt at
30 November 2017 is expected to be much improved at approximately
GBP4.7m, reflecting initiatives put in place to improve cash
generation.
The Board has also completed its operational resource review.
The key outcome of this review is the integration of the Microsoft
Dynamics businesses (AX, NAV and CRM) into a single unit to create
a unified operation, with enhanced and streamlined customer
delivery capability. This integration, together with a review of
K3's IP development strategy, will result in additional
reorganisation costs in FY2018 and a non-cash write-down relating
to deferred capitalised development costs of up to GBP2.5m. Further
information on both will be provided with the announcement of
results.
Other changes resulting from the review include: the integration
of software product development and own IP management functions
into a single Group-level IP unit; the creation of a single unit
focusing on driving sales and support of K3's own
Software-as-a-Service offering; and an increased focus on strategic
co-operation with global System Integrators in the Enterprise
market for delivery services and support, with K3 providing IP and
industry expertise. These changes will support the Board's plans to
increase own IP sales and drive recurring revenues.
The Board anticipates some associated cost savings as a result
of the streamlining of certain operations but, given its ongoing
investment plans for its own IP and sales, it does not anticipate a
net reduction in the Group's cost base beyond what has been
previously communicated.
K3's own IP strategy includes its easy-to-integrate NextGen
platform and accompanying market-leading modules (together,
"Imagine"), including Imagine POS (Point of Sale). Management is
pleased to report that Imagine POS has now been sold to 12
customers, with the pipeline of opportunities continuing to
grow.
K3 is also pleased to confirm that Stuart Darling, who became
interim Chairman of the Company in early July 2017, has been
appointed as Chairman on a permanent basis.
The Board looks forward to providing a further update on trading
towards the end of March with the announcement of results for the
17 month period. It remains confident of the Group's continued
progress in 2018.
Enquiries:
K3 Business Technology Adalsteinn Valdimarsson T: 0161 876 4498
Group plc (CEO)
www.k3btg.com Robert Price (CFO)
finnCap Limited Julian Blunt, James T: 020 7220 0500
Thompson
(Nominated Adviser Emily Morris (Corporate
and Broker) broking)
KTZ Communications Katie Tzouliadis, T: 020 3178 6378
Irene Bermont-Penn,
Emma Pearson
This information is provided by RNS
The company news service from the London Stock Exchange
END
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