Monday 26 July 2021 11:50 am

AIM-listed K3 Business Technology sees pandemic increase losses

Software company K3 Business Technology saw a year-on-year loss of £4.3m before taxes due to the impacts of the pandemic.

The Salford-based company said performance was in line with their expectations, after announcing a ‘steady’ revenue at £23.2m in the first six months ending May 31, 2021.

Gross margins fell to 56.2per cent from 60.4per cent in 2020. The decrease in revenue reflected the strains of the pandemic on third-party customer bases, particularly those in association with smaller retailers and distributors, the company said.

Listed on AIM, K3 said third-party products still managed to generate £5.6m of revenue, despite being the sector most hit by the pandemic.

Marco Vergani, chief executive officer of the group, said, “the Group delivered a resilient performance despite certain parts of the customer base being significantly disrupted by the pandemic.

K3 has an exciting product offering and talented teams. This gives us a firm basis from which to move forward as we continue to build own-IP sales, which will generate long-term, high-margin recurring income. We remain very confident that there is a significant market opportunity for the Group,” he continued.

The appointment of Vergani in March 2021 led to the evaluation of operations and market strategy along with management changes with the aims of improving the company’s strategic course.

Vergani says, his priority is to carry the evaluations. He expects the process to ‘be substantially completed over the coming months.’

“K3 Business Technology said their own-IP generated £8.4m of revenue and a gross profit of £6.2m, compared to £6.3m the previous year. Whilst global accounts made up £9.2m of revenue and a gross profit of £3.7m.

Shares for the software business were down 3.8per cent on Monday at 203pence in London.