Salford’s K3 Business Technology, a software provider specialising in products for the fashion retail industry, saw its shares drop 4.4 per cent to 127.5p in early morning trading on Wednesday following a slide in revenue to £19.9 million in HY1 2022 against £20.9 million the year before.
In its filing to the LSE, K3 Business Technology confirmed a loss for the financial period of £2.7 million from a profit of £5 million in the previous year.
The software solutions group announced a loss from continuing operations of £2.8 million from £2.5 million the previous year, which it noted was in line with management expectations.
The loss was related to depreciation and amortisation of acquired intangibles, exceptional reorganisation and acquisition costs and share-based payment charges for a total of £3.6 million compared to £3.4 million in HY1 201.
K3 highlighted an adjusted EBITDA uptick to £1 million from £900,000, along with a gross margin rise to 60 per cent against 58 per cent, reflecting higher margins in K3 Products and Third-Party Solutions.
The firm also noted the acquisition of sustainability-focused software developer ViJi in January 2022, broadening its offering in supply-chain transparency and traceability, and increasing operational investment by £200,000.
Group CEO Marco Vergani said: “K3 Products has clear growth opportunities in its fashion and apparel markets and we are focusing on three critical areas for customers – sustainability, omni-channel and business insights. The acquisition of the sustainability-focused software developer, ViJi, in the period, will enhance our offering here. Third-party solutions remains a significant cash generator. We are investing in products and delivery resource to support growth.”
K3 Business Technology confirmed net cash at £1.4 million against £4.4. million year-on-year, with the firm expecting its FY 2022 financial position to close “significantly higher” as a result of seasonal weighting of cash inflows.