Published on: September 27, 2017
Numbers in line, refocusing continues
K3 has reported its second interim results for the six month and twelve month periods to the end of June 2017 as it transitions to a November year end. Results for the twelve month period are in line with guidance given on the level of operating losses in June’s trading update reflecting previously flagged contract slippage in the Enterprise segment. The announcement says that the review of K3’s resources is progressing well with July’s successful fundraising providing strategic flexibility. The Group continues to focus on the SME marketplace with increased sales of its own IP producing a higher proportion of recurring revenue within total revenue. Meanwhile, the reorganisation programme has further streamlined the business and annualised savings of £3.7 million have been achieved so far. Management highlights the positive momentum in the business and notes a healthy new business pipeline. We make no changes to estimates for FY 2017E or FY 2018E, noting these in-line results, the ongoing repositioning of K3, its cost savings programme and the focus on cash generation.