K3 is a leading global supplier of integrated business systems to retailers, manufacturers and distributors. We have over 25 years’ experience of delivering award winning solutions for more than 3000 customers across 20 countries. Our success is built upon world class software, tailored by our industry expertise and delivered by our world class service.

World Class Software
We are a leading supplier of Microsoft’s business solutions and a member of Microsoft’s Inner Circle and President’s Club. Our close relationship with Microsoft and in depth knowledge of their solutions means that you can be confident that the investment you’re making today will continue to payback now and in the future.

We also develop our own best practice software which is tailored to companies within the food, retail and manufacturing industries. These industry bespoke solutions are designed to maximise our customers’ efficiency and overall business performance. Between K3 and Microsoft we know we can provide a market leading solution that will fit a diverse range of business needs.

World Class Service
We are renowned for our unique personal service, our skill of listening to our clients and offering expertise that allows us to deliver the right solution, on time and on budget.

Collaboration is the foundation of our approach. We get to know your business by immersing ourselves in your strategy, we consult with you, we design the perfect solution to match your business needs, we implement it, make it work and ensure it continues to deliver business benefits.

Industry Expertise
We are experts in the retail, manufacturing and distribution industries and know about their processes, needs and wants – in depth. Our success is based on our ability to convert this knowledge into value for our customers.

As with all business solutions people are the key to success when it comes to implementation which is why we employ experienced industry professionals who understand the issues you face on a daily basis. Because our team of experts have this industry insight they make sure you get a best-of-breed solution that will address your specific requirements and objectives – both today and for the future.

K3 Business Technology Group is in the software and computer services sector. The Company’s securities are not traded on any exchange or trading platform other than AIM.


http://www.k3btg.com/

Final results



Financial Highlights


•Benefits of growth strategy and transition to own IP model coming through in higher margins and profitability:

o K3 Product licence revenues increased to c.25% of total licence sales (2015: 23%)

o gross margins up to 54.4% from 51.5%

o channel partner sales gaining momentum

o new orders hit a record high of £35.3m, up 66%
• Results broadly in line with market expectations despite a significant customer, My Local, entering administration at the end of the period


• Recurring revenues (from software maintenance renewals, support contracts and hosting & managed services) grew to £41.62m and remain high at 47% of total revenues


• Adj. EPS*2 increased by 21% to 23.5p (2015: 19.4p)


• Operating cash at £5.50m was affected by record sales activity at year end


•Placing in April raised £13.04m (net) for acquisition of DdD Retail and to support growth


•Net debt reduced by 26% to £8.88m, aided by placing proceeds - debt expected to decrease significantly


• Proposed final (and total) dividend of 1.75p per share (2015: 1.50p)







Operational Highlights




• Record software licence sales at £16.23m, up 17% - helped by a strong contribution from retail software sales, including "ax l is Fashion" deals


•Channel partner network secured three major wins, Lacoste, KLiNGEL, TriStyle


•Hosting & managed services activities progressed well - although impacted by the major customer entering administration


• Acquisitions - of DdD Retail (April 2016) and Merac Limited (acquired since the year end)

- add valuable IP and recurring revenues


•Pipeline of new business up 23% to £76.1m on a like-for-like basis


•Proposed Board changes - David Bolton, CEO to become Chairman


•Board remains confident about growth outlook

ST of IC today - So, with the outlook positive, and K3 well funded, I have no hesitation reiterating my buy advice. On 13.5 times forward earnings, and offering decent upside to my 425p target price, K3's shares are a decent buy at 350p.