K3 Business Techology boss departs in board room shake-up
Salford software group K3 Business Technology’s chief executive, Marco Vergani, has been replaced today (October 30) by non-executive chairman, Tom Crawford, just over two-and-a-half years after he joined the business.
K3, which provides business‐critical software solutions focused on fashion and apparel brands, said Mr Crawford will become executive chairman as part of board changes brought about by a new management structure, with the group’s unit heads reporting directly to the board.
It said the management changes create new reporting lines and devolve greater responsibility to the leadership teams within the group’s businesses, which are separately managed and respectively address different market sectors.
It reflects the board’s strategy to further simplify operations, more effectively address the opportunities within market sectors, and to drive shareholder value, the group said.
K3’s overall performance since August, when the company last commented on trading, remains on track to generate an adjusted operating profit in line with the market forecast.
The final quarter of the financial year typically generates significant profit and cash flows from annual renewals of software licences and support and maintenance contracts. This remains the case in the current financial year ending November 30, 2023, and the level of renewals is expected to be at around 98% as in previous years.
The board said it remains focused on the transition to higher quality recurring earnings, while continuing with cost discipline and operational simplification.
The cost base at Global Accounts is being brought into line with the reduction in activity, as previously reported in August, while the uptake of the group’s flagship K3 Fashion product remains strong with 25% growth to date in annualised recurring revenue across strategic fashion products.
The board said it would like to place on record its thanks to Marco for his contribution to K3, and in particular his role in resetting the group’s strategic direction and goals, including at the Fashion business unit and his decision on, and delivery of, the current decentralisation policy. He leaves with the board’s best wishes for the future.
Mr Vergani joined the group in March 2021, with more than 30 years’ experience in the technology industry having held senior roles at IBM for 26 years, latterly as vice president of EMEA sales for Global Process Services and as a senior executive at Qubit.
At the time, Tom Crawford said: “Marco Vergani brings significant sector experience and a strong record of driving sales. Marco will be leading a re-evaluation of our target markets for K3|imagine, which continues to offer exciting growth potential.”
Marco Vergani said: “My background in commercial sales and the retail and direct-to-consumer sectors is directly relevant, and I look forward to working with colleagues, clients, and strategic partners to continue to innovate and drive long term, high quality, subscription-based earnings.”
K3 announced interim results in August which showed turnover had risen slightly, but pre-tax losses deepened, although the board said it was confident of a strong second half performance.
Figures for the six months ending May 31, 2023, revealed sales of £20.3m from continuing operations, compared with £19.9m the previous year. Pre-tax losses on continuing operations were £2.9m, up from £2.8m a year ago. Adjusted net cash stood at £2.9m, up from £1.4m in 2022.
The board said the overall performance was ahead of management expectations.
