K3 bullish on half-year profits

SALFORD-based software firm K3 Business Technology has said that profits in the six months to December 31 are likely to be “materially ahead” of the corresponding period in 2009.

In a trading statement issued this morning, the firm said that its pipeline of new business opportunities remained strong and that it expected to sign a number of major new contracts in the second half of its financial year.

It also said that it continues to generate strong cash flows but that net debt at December 31 was higher at £11.6m, which reflected draw downs made to complete its series of recent acquisitions.

It said that deals done in November and December had allowed it to make “”strategically important” progress, particularly in the development of managed services and hosting.

“As stated in September 2010, we believe that the scope of the Group’s growth opportunities has widened with the strategic moves we have made since March 2010,” the company said.

“We are encouraged by the progress that we have already made in developing these opportunities and believe that they have significant potential to drive long term contracted income and cash generation.

“With some 40% of annual revenues supported by annual software licence renewals and typically a further 35% of revenues generated by new sales to existing customers, the Board continues to view prospects for the current year and beyond very positively.”