Retail software business to raise £7.5m on stock market
Salford-based K3 Business Technology Group, the listed business which provides software and managed services to the retail, manufacturing and distribution sectors, plans to raise £7.5m through a share placing.
The £90m-turnover company is already in the process of reviewing its resources to refocus its growth strategy around its cash generating business units and large SME customer base.
It said the proceeds raised will be used to strengthen its balance sheet and provide additional working capital whilst the board continues with its review of group resources and operations.
Adalsteinn Valdimarsson, chief executive of K3, said: “The group is undergoing transition but we believe the strategic steps we are taking create a solid platform for future growth.
“We remain encouraged by the underlying strength and performance of K3’s profitable business units which generate significant recurring revenues and cash flows from our large SME customer base.
“We are also pleased with the pilot project underway for our new cloud-based modular technologies, which we expect to generate opportunities with both new and existing customers.”
The placing to raise up to £7.5m before expenses prices the 5.35 million shares at 140 pence each, and will represent around 15% of the company’s existing issued share capital, with an open offer of up to 720,000 shares at 140 pence representing around 2%.
K3 has also announced the retirement of chairman David Bolton after almost 20 years and the appointment of chief financial officer Rob Price to the board. Non-executive director Stuart Darling will hold the role of chairman on an interim basis, while a new chairman is recruited.
K3 had pre-tax profits of £4.5m on a turnover of just under £90m for the year to the end of June 2016.