K3 appoints new CEO as it draws line under bruising 2020
Exposure to fashion and retail industries left its mark in K3 in 2020
K3 Business Technology Group has hired a new CEO as it draws a line under a bruising 2020.
Marco Vergani has stepped into the CEO hot seat, bringing sector experience and a strong record of driving sales, claims K3.
He takes over from Adalsteinn Valdimarsson who left K3 after five years with the firm following the sale of its managed services business to Node4 earlier this year.
K3 chairman Tom Crawford said Vergani will lead a re-evaluation of its own software offering for the retail space.
"Marco will be leading a re-evaluation of our target markets for K3|imagine, which continues to offer exciting growth potential. We have a strong product offering and look forward to a return to more normal trading conditions as the coronavirus vaccine programme continues and lockdown restrictions are eased," he said.
The solutions provider saw revenues fall by 2.5 per cent to £48.8m for the 12 months ending 30 November 2020, while adjusted EBITDA fell 44 per cent to £4m. Losses before tax from continuing operations came in at £20.9m compared with £700,000 in 2019.
The Manchester-based firm put its loss-making UK Microsoft Dynamics business into administration last April as the pandemic began to unfold in an effort to boost its liquidity position.
The business unit logged an operating loss of more than £3m on a turnover of £21m for its fiscal 2019 and was expected to make further losses in 2020.
K3 meanwhile secured £6m in loans from Barclays bank and its two major shareholders to shore up its liquidity during the crisis.
The business then went on to sell its managed services unit, Starcom Technologies, this February to private equity-backed firm Node4 for £14.7m.
The unit generated revenues of £10.2m and logged a pre-tax profit of £1.2m.
Revenues for K3's own IP products K3|fasion and K3|imagine also fell during the year - by 10 per cent to £16.1m.
However, the firm did manage to grow its Global Accounts business revenues by 10 per cent to £17.3m.
Crawford said that the business has shown resilience when faced with the unprecedented challenges of the pandemic.
"Implementing our strategy to focus on Own IP and Global Accounts and to cease investing in legacy POS products, we took a number of important strategic decisions in line with our growth strategy. These included placing the loss-making UK Dynamics unit into administration, raising additional funding and, in late February 2021, selling Starcom, our managed services unit, for £14.7m. The Group is now in a significantly stronger financial position and is better placed to drive our Own-IP strategy."