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Published on: March 12, 2013

No pain, no gain

K3 published results for H1 FY13 showing the pressures that were well-heralded in the trading update on 21 January. The group has suffered from a downturn in the Retail marketplace, impacting the UK business and many of the International operations. We continue to believe that K3 is doing the right things : investing in Retail AX and migrating to managed services. Unfortunately, both of these have led to short-term pressure, but we believe this is pain worth taking in return for the likely long-term gain. Although risk remains, there are many reasons to believe that H2 should deliver better news-we highlight these in the detail of the note.

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