ERP software reseller K3 is pinning its hopes of a recovery on intellectual property (IP) after undergoing a difficult business restructure.
In an update to London's AIM today, K3 said it has been through a "period of significant change", which has left it with "streamlined operations".
It also reported financial results for the 17 months to 30 November 2017, after changing its reporting dates.
Revenue for this period was £118.2m - equating to £83.4m on a pro-rata basis - compared with £89.2m for the 12 months ending 30 June 2016.
The group also had to stump up £8.9m in one-off costs, related to the restructure and continued shift in focus towards IP.
CEO Adalsteinn Valdimarsson highlighted the importance that this IP will have moving forward.
"We have implemented significant changes at K3 over the last 18 months, aimed at placing the group on a better footing for long-term revenue and profit growth and improved cash generation," he said.
"The group's operations are now more streamlined and integrated, and we have refocused our IP development road map. While the process has involved cultural change and substantial one-off costs, we are seeing the benefits come through.
"We have strong offerings in our chosen markets across the supply chain, including our new cloud-native IP. Since the period end, trading has been encouraging, especially for own IP sales.
"While there is still work to be done, we remain confident about prospects for continuing progress."
In the 17-month period, K3's IP accounted for 19.8 per cent of the VAR's total revenue, compared with 13.9 per cent in the previous 12 months.
K3's flagship product Imagine IP is a cloud-native delivery platform that is embedded with software from Microsoft and is 'system agnostic', meaning it can run on a client's existing IT infrastructure.
"The whole offering therefore enables customers to adopt innovative solutions and applications rapidly and flexibly," K3 said.
"It also offers them a faster return on investment and extends the life of their previous IT investments. We intend to develop additional applications for Imagine in order to broaden the scope and target market of our existing solutions set, and view its growth potential very positively."
K3 expects its revenue to decline further as it continues to shift away from on-premise business and towards its own IP and managed services, but said that in the long-term this switch will prove fruitful.
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