K3 bullish despite sales slump
LANCASHIRE software specialist K3 business technology has seen profits and revenue drop but said new contract wins should bolster second half sales.
K3, based in Colne, provides software and consultancy services to retailers and manufacturers.
In a statement chairman Tom Milne said the group’s overall performance was “encouraging” in the face of challenging market conditions.
Lower revenues in the group’s services arm have picked up and new contract wins are expected to underpin income in the second half.
A total of 24 new contracts were signed across the group in the first half, with an aggregate contract value of £4.5m compared to 20, worth a total of £2.4m, in the same period last year.
Cash generation was described as “healthy” and K3 is continuing to look for potential acquisitions.
In the six months to June 30 pre-tax profits dropped to £131,000 from £908,000 on sales of £15.9m, down 7%.
The group’s adjusted profit figure, before amortisation and share-based payments, was £1.54m, down 33%.
Chairman Tom Milne said: “Although new business has been tougher, new contract wins within our two core business units were pleasing and will help underpin services income into the second half.”
“While the trading environment is expected to remain difficult, there is a high degree of resilience to the business, with a significant proportion of the group’s revenue underpinned by high levels of predictable income arising from annual software licence renewals and maintenance income.”
