Profits slide in K3’s ‘toughest year’

BUSINESS software supplier K3 Business Technology has reported a sharp decline in pre-tax profits in one of its “toughest” years.

The Salford firm said sales slipped by £4.4m to £63.5m in the year to the end of June while pre-tax profits were down to £462,000 from £6m last time.

AIM-listed K3 supplies and supports Microsoft-based enterprise resource planning (ERP) software – a retail system that manages everything from stock to till sales.

Earlier this year the business warned that deferrals by some clients would hit the full-year performance, but  orders were stronger in the final quarter.

Chairman Tom Milne said: “The year was one of K3’s toughest, combining very weak markets, especially in the retail sector, at a time of major investment in Project Gemstone, which is delivering a new Microsoft-certified AX solution for the retail market.   
 
“The final quarter of the financial year however ended very encouragingly. We secured a number of initial order wins for the first release of Gemstone with some high profile retailers. We also sold significantly more of our established Microsoft NAV-based retail solution in this quarter than in any other quarter in the year. The full benefit of these wins will be felt in the new financial year. More generally, there seem to be signs that retailers are returning to spending on technology.”