K3 hails turnaround and looks to growth

VAR sees half-year pre-tax profit mushroom by 363 per cent and attributes success to new Dynamics-based offering

K3 Business Technology Group has seen half-year profit rocket by 363 per cent thanks to the success of its new Microsoft Dynamics AX offering.

For the six months to 31 December 201, the firm – whose technology plays a strong role in the fashion industry – recorded £34.4m in turnover, up nine per cent from the £31.5m in the year before.

Pre-tax profit stood at £880,000, up a whopping 363 per cent from the £190,000 recorded in the previous year. Net debt also dropped from £12.3m to £9.9m in the period.

It also underwent some board changes at the start of the year, with existing chief finance officer David Bolton taking the position of chief executive in the place of Andy Makeham, who vacated the role after 14 years.

The firm revealed it has signed new contracts worth £12.7m in the first six months, compared with £3.1m the previous year. In fact, the number of new contracts signed match the total won in the last full financial year.

Of that, £8.3m of the new contracts were for its Microsoft Dynamics-based ax|is, which included a number of high profile retailers.

Tom Milne, chairman of K3 said in a statement: “The most important feature of these results is the early success we can now demonstrate with our new "ax|is" solution, which has been under development over the past 18 months. Sentiment in the retail sector is improving and we are encouraged both by the new orders we closed and by the level of interest in our solution.

“Our SYSPRO and Sage Division also continued to perform robustly, providing high levels of recurring income and cash, together with a good level of new business wins. Our Managed Services Division moved into profitability and will continue to benefit from the upturn in new orders across the group, particularly for Microsoft AX and SYSPRO systems,” he said.

He added the K3 ax|is solution has the potential to be a significant growth driver, and the firm plans to launch new products tailored to specific retail market segments and widening channels to market.