Software and cloud tech firm on target for the year

Software and cloud solutions firm K3 says it is on track meet market expectations for the year.

The Manchester firm has published a trading update for last six months.

The company said it continues to progress well with the benefits of transformation initiatives coming through across all key areas of its activity.

K3 remains on track to meet current market expectations for this year although results will be more second-half weighted than normal.

The management team’s focus on cash generation and strong financial management continues, and net debt at 31 May 2019 is 32% lower at £5.8m than a year ago.

The strong weighting towards the second half of the financial year reflects the high proportion of software licence and maintenance contract renewals that fall in the final quarter.

The firm’s trading has also been affected by the uncertainty surrounding Brexit.

This was felt in prolonged customer decision-making processes, which consequently affected services activity.

However, towards the end of the first half a number of major deals closed, with the ongoing pipeline looking healthy.

Three new customers were signed for K3  fashion, including Regatta, the outdoor clothing brand, plus two existing customers significantly ramped-up software licence orders.

Significantly, four of the new orders were secured through channel partners.

In other key areas, sales from global accounts and managed services, which includes hosting, continued to grow, and K3  Cloud, the group’s Infrastructure as a service offering was launched.

Half year results are expected to be reported on 9 July together with a further update on trading.