K3 Business Technology Group PLC Delay to Final Results (2941H)
24 March 2020 - 6:00PM
UK Regulatory
TIDMKBT
RNS Number : 2941H
K3 Business Technology Group PLC
24 March 2020
AIM: KBT
24 March 2020
K3 Business Technology Group plc
("K3" or "the Company")
Delay to announcement of Final Results, Trading Update and
Cancellation of Dividend
K3, which provides mission--critical business software, cloud
solutions and managed services intended to announce its preliminary
results for the year ended 30 November 2019 on 26 March 2020.
However, following guidance from the Financial Conduct Authority
("FCA") and AIM, and having consulted with its advisers including
the Group's auditors, K3 will be delaying the publication of these
results. The Company will advise when it is able to clarify a date
for release.
In the interim, the Company provides the following update on
trading.
The Board expects results for the year to 30 November 2019 to be
in line with guidance provided by the Company on 22 October 2019,
and reports that net bank debt at 20 March stood at approximately
GBP5.5m. Whilst the Board was encouraged by the Company's trading
prospects at the start of the current financial year, the
unprecedented events now being experienced due to the Coronavirus
outbreak, which has resulted in contract delays and deferrals, make
it difficult to forecast revenues for the year to 30 November 2020.
The Board is therefore withdrawing current guidance until normal
operations resume globally. It will provide a further trading
update following the close of K3's half year trading period ending
31 May 2020.
The Coronavirus pandemic and its potential impact on the
business is now the Board's primary focus. The Company's priority
is the welfare of its employees and supporting customers and
business partners during this crisis. A number of measures are
being taken to mitigate its impact, and material steps are being
taken to reduce costs. This includes a decision to cancel the
dividend in respect of the year ended 30 November 2019. Separately,
the Board is actively reviewing options to wind-down one of the
Group's underperforming third-party solutions units in the UK.
Plans are being assessed and updated as the situation evolves.
The Board has also taken pre-emptive steps to improve the
Company's liquidity. Productive discussions are being held with
Barclays and K3's two major shareholders, Kestrel Partners LLP
(which has a non-executive director representative on the Board)
and Johan Claesson (a non--executive director) with the objective
of significantly strengthening the Company's balance sheet. All
parties remain supportive of K3 and an announcement regarding the
successful completion of these funding discussions is expected to
be made over the course of the next week.
The Board intends to focus on maintaining and growing the
Company's core profitable business units and is accelerating the
transition towards its own IP, with the new flagship Imagine
product starting to see promising levels of adoption, having
already signed up 106 customers.
Adalsteinn Valdimarsson, Chief Executive Officer, commented:
"K3 provides mission critical software to a range of sectors
worldwide, with an installed base of 3,700 business customers and a
significant proportion of revenues that are recurring in nature. We
believe these attributes together with the pre-emptive action taken
by the Board in relation to cost-cutting and securing additional
liquidity will help us weather the challenges caused by the
Coronavirus global pandemic. Looking beyond this crisis, we see
good growth opportunities ahead."
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
Enquiries:
K3 Business Technology Adalsteinn Valdimarsson, T: 0161 876 4498
Group plc CEO
Rob Price, CFO
finnCap Limited (NOMAD Julian Blunt/James Thompson T: 020 7220 0500
& Broker) (Corporate Finance)
Camille Gochez (Corporate
Broking)
KTZ Communications Katie Tzouliadis/Dan T: 020 3178 6378
Mahoney
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END
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