Strong first half for business services specialist

K3 Capital, the Bolton-based business and company sales specialist, has reported strong first half results today aided by contributions from its acquisitions.

Revenues for the six months to November 30, 2020, were £17.842m, compared with £7.997m the previous year.

Pre-tax profits were static at £3.030m, against £3.258m a year ago.

A dividend of 3.0p per share has been recommended, down from last year’s 3.7p payout.

Sales were helped by first time contributions from acquisitions randd and Quantuma, albeit limited to four months of trading.

All the group’s companies are trading strongly, despite the COVID impact and national lockdowns. KBS achieved revenue of £5.9m, randd £2.6m, and Quantuma £9.3m.

Net cash for the six month period stood at £10.1m, up from £6.8m in 2020.

K3 hailed the completion of its two transformational and earnings-enhancing acquisitions which, it said, provide diversified revenues and cyclical balance, and the creation of a high margin, cash generative, and debt free professional services group.

Looking ahead, the group said KBS continues to see strong levels of performance, with January producing the highest profit month so far in fiscal year 2021 and the pipeline remains strong, giving confidence for the remainder of the second half and beyond.

Randd continues to produce steady growth given the contracted and recurring nature of its revenues and management is excited about the opportunities presented by the roll-out of the volume direct marketing and sales function.

Meanwhile, Quantuma continues to grow its market share against a backdrop of significantly reduced insolvency statistics across the UK due to government support to SMEs.

Chief executive, John Rigby, said: “I am delighted to report that both myself and the board are extremely satisfied with a strong financial performance during the first half of FY21.

“As stated at the time of the trading update, trading was ahead of management’s expectations which is particularly impressive considering it was achieved against a backdrop of unprecedented challenges presented by the global pandemic, not least the multiple national and regional lockdowns.

“We also repaid all monies claimed under the Government’s COVID-19 Job Retention Scheme in the financial period.”

He added: “We made excellent strategic progress in the period, particularly through the acquisitions of randd and Quantuma, with cross referrals of clients across the group companies already starting to add real value.

“It is also very pleasing to see that we have not ‘sat back’ following the two acquisitions and within the period we have added further strength and depth through lateral hires, a joint venture and three bolt-on acquisitions for c£1m of cash and a modest earn out structure.

“These acquisitions include an Essex-based insolvency practice, an overseas insolvency foothold with an opportunity to win high profile mandates, and today we have completed the acquisition of a specialist tax investigations business.”

He said: “With the benefit of our strong financial position and platform, we intend to continue to build a significant group of complementary professional services businesses servicing UK SME’s, both organically and through acquisition. We remain confident in our outlook for the current and future years.”