Published on: March 17, 2015

Encouraging H1 with strong revenues

Strong revenue growth of 21% in H1 15 was flagged in January’s trading update and reflects the continuing success of the Group’s AX solution in particular. Adjusted profit from operations was up by 14% and Adjusted EPS increased by 9%. Net debt stood at £12.07 million at the end of H1 15. Software licence sales increased to a record high with related services income also growing well on the back of deals closed in FY14. The business continues to see the cost pressures that it has previously mentioned but is starting to see the benefits of management action on training and outsourcing. For the first time, K3’s segmental reporting is by industry sector: Retail, and Manufacturing & Distribution. There is also useful detail on sales of K3’s own intellectual property where margins are higher than the Group average. Having increased estimates in January, we make no further changes to our numbers apart from increasing net debt expectations for FY15 and FY16.