Published on: February 26, 2021
Disposal underlines focus on core growth
As K3 continues to hone its focus on higher margin core businesses, it has announced the sale of its managed services unit, Starcom Technologies, to Node4 Ltd for £14.7 million in cash (including £0.5m of cash on the balance sheet). The disposal will give K3 a profit in excess of £10 million in the Group’s current financial year (FY 2021E), and further accelerates the strengthening of its balance sheet. We estimate that Group revenues will be more than 70% sourced from outside the UK following this sale of K3’s UK managed services business. The disposal will provide management with the opportunity to concentrate its focus on the K3|imagine platform and Own IP sales together with Global Accounts – both of which proved to be resilient during K3’s financial Q2 2020 which was affected by COVID-19.