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K3 Business Technology Group was a business going through a transformation before the coronavirus pandemic hit, as it looked focus the growth strategy around the cash generating business units and its large small and medium-sized enterprise customer base.
The determination to generate more revenues from its own IP and large accounts continues to be the aim, but the latest sets of trading numbers have shown the impact of a tough 2020.
Revenues for the 12 months to 30 November 2021 were down from £50.1m to £48.8m. Losses before taxation from continuing operations came in at £20.9m, compared with the prior year loss of £1.1m.
The year saw the firm place its loss-making UK Dynamics business into administration in April 2020, leaving the group focused on profitable core units. Post-FY results, the firm continued to trim the portfolio with the recent sale of Starcom Technologies Ltd in February 2021, for £14.7m to Node4.
On the plus side, the portion of revenue coming from recurring business increased to 76.2% from 73.2%. Global accounts also improved with £17.3m, compared with £15.7m in 2019.
“In the face of unprecedented challenges created by the coronavirus pandemic, I am pleased with the resilience K3 has demonstrated,” said Tom Crawford, chairman of K3. “Our high level of predictable and recurring revenues, as well as our large and diverse customer base, led to robust results at a trading level.
“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,” he added. “The group is now in a significantly stronger financial position and is better placed to drive our Own-IP strategy.”
The firm has been looking for a fresh CEO since Adalsteinn Valdimarsson stepped down after the Starcom sale, and has announced that Marco Vergani is going to be taking up that role.
He comes with a career that has included 26 years at IBM, most recently as vice-president of Europe, the Middle East and Africa sales for Global Process Services.
“Marco will be leading a re-evaluation of our target markets for K3 imagine, which continues to offer exciting growth potential,” said Crawford. “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.”
Vergani said: “The Company has developed a number of market-leading software solutions, and I believe there is a significant opportunity to sharpen its existing strategy to grow own-IP sales, and in particular the K3 imagine solution.”