K3 Business Technology Group results fail to reassure

AIM-listed commerce software firm K3 Business Technology Group (LON:KBT) saw its share price drop by 4.32% to 65.50p (as of 10:00 BST) after posting results for the half year ended 30th June. Pre-tax losses were roughly in line with the comparative period, but the overall loss for the period tripled due to discontinued activities. Management expect to record stronger performance during the second half, in line with normal seasonal trends.

CEO Adalsteinn Valdimarsson commented: “K3 has performed resiliently in the face of the challenges created by the coronavirus pandemic and national government lockdowns. The Group’s large and diverse customer base has helped to support this performance, and results are also underpinned by a significant level of recurring income.

“Our staff’s response to the coronavirus disruption has been tremendous, and while sales were affected, we are pleased with the continuinK3 Business Technologyg uptake of K3|imagine, now in its second year of sales. This product offers customers across the supply chain sector the ability to upgrade and adopt new technology easily and cost-effectively. We believe it addresses a significant market opportunity.

“With the easing of lockdown restrictions, we expect to see an improvement in sales activity. Earnings and cash generation are typically weighted to the second half of the financial year, reflecting the high proportion of software licence and support contracts renewals that fall in the period. The outturn for the second half is therefore expected to show an improvement on the first half”.