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Acquisition of Retail Systems Group K3, which supplies and supports Enterprise Resource Planning ("ERP") software to the supply chain industry, is pleased to announce that it has completed the acquisition of Retail Systems Group Ltd ("RSG"), one of the leading providers of Microsoft Dynamics 'RMS' to retailers in the UK and Ireland. The initial consideration for the acquisition is £1.28 million payable in cash on completion, with an additional payment of approximately £1.5 million in respect of surplus cash in the business at completion. The initial consideration includes a retention of £0.15m for the period of one year following completion to cover any warranty and indemnity claims. An earn-out of up to £0.2m is also payable over the next two years, dependent on certain performance criteria. The acquisition offers K3 access to the significant market for smaller retailers, complementing the Group's existing mid-range retail software offering. RSG also has a well established managed service division which will further expand K3's own growing managed services division. RSG has approximately 200 customers, including Aston Martin, Highgrove House, Triumph and the National Portrait Gallery. For the year to 30 June 2011, RSG generated sales of £2 million and an operating profit of £300,000. Approximately 40% of annual revenues are recurring, derived equally from managed services and maintenance/support. A further 35% of annual revenues are typically from additional sales to existing customers.
http://www.investegate.co.uk/Article.aspx?id=201112200700132882U
K3 Business Technology Group plc ("K3" or the "Company") Statement regarding possible offer and strategic review The board of K3 (the "Board") announces that it has received an approach from its largest shareholder, Mr P J Claesson, regarding a possible offer to acquire the entire issued and to be issued ordinary share capital of the Company not already owned by Mr Claesson. Mr Claesson is also a non-executive director of K3, holding approximately 19.5% of the issued share capital of the Company. Mr Claesson has indicated to the Board that he feels that the value of the Company and its future opportunities, especially in its managed services business, are not fully reflected in the current share price. The Board wishes to make clear that discussions with Mr Claesson are at an early stage and there can be no certainty that any offer will be forthcoming. Following the approach by Mr Claesson, and in light of the investment which the Board believes is required to fully exploit the growth potential of its managed services business, the Board has decided to initiate a strategic review of the options available to the Company and to explore whether a possible offer by Mr Claesson, or any other party, might be in the best interests of K3 and shareholders as a whole. Deloitte Corporate Finance has been appointed to assist with the strategic review which might or might not lead to an offer for the Company. This review is at an early stage and the Board wishes to stress that there can be no certainty that any transaction will be concluded. For clarity, K3 also reiterates the comment made by Chairman, Tom Milne, at the Company's Annual General Meeting on 23 November 2011, which was as follows, "The Board would like to confirm that it remains confident of the Company meeting management's expectations for the full year."
http://www.investegate.co.uk/Article.aspx?id=201112010700411202T
K3 Business Technology is the UK’s biggest Microsoft Dynamics partner, offering business critical, supply chain management software, consultancy and managed services to the Retail, Distribution and Manufacturing sectors, we bought in at an average of around 100p when the fundamentals were great but the market just hated small technology stocks, allowing us to buy into a great company at an attractive price. The shares are now 207p. K3 has had a busy 12 months announcing a string of accretive acquisitions along with enhancing underlying operational profitability. For the half year ended 31st December 2010 the company announced an underlying 13.6% increase in earnings, and despite constrained retail and manufacturing sectors, the cost effective products and services offered by the company ensure that a very high proportion of the revenue from its circa 1950 customer base is recurring. We initially invested in K3 as we saw the company’s position as the key player in a niche industry as materially attractive. In addition, principally one of the weaknesses of smaller companies is a reliance on one or two core customers, by contrast K3’s customer base is vast. The product offering itself was also a material driver of our investment. We are, and remain, of the view that companies offering products and services which drive cost saving efficiencies through its client base, will operate and trade strongly moving forward. Couple the above with strong, predictable, recurring revenues and it is no wonder we are already ahead by more than 100%. Now capitalised at £52.9 million, for the full year ended 30th June 2010 we expect K3 to report revenues of circa £52 million and at an underlying level, profit of £8.1 million, £6.24 million after tax. K3 is therefore currently trading on a forward multiple of just 9 times FY11 prospective earnings and given that it will deliver consistent mid-teens earnings growth going forward then we cannot see how the shares are worth less than 320p. SF t1ps Smaller Companies Growth Fund
In line with its strategy of acquiring customer bases with strong recurring revenues, K3 Business Technology* (KBT) has bought Sage and e-commerce provider FD Systems for 2.23 million pounds. The business solutions software supplier will also pay off the targets loans of 0.41 million pounds and could pay up to a further 1.4 million pounds depending on performance. FD Systems will be incorporated into K3's existing Sage division and is expected to generate underlying annual profits of 0.75 million pounds.
Trading Update K3, which provides and supports Enterprise Resource Planning software, hosting and managed services to the supply chain industry, is pleased to announce the following update on trading for the financial year to 30 June 2011. The Group's trading results for the year ended 30 June 2011 are anticipated to be in line with current market expectations, with both sales and adjusted operating profit* showing a significant increase year on year. The rise reflects both the benefit of acquisitions, with acquisitions performing well, and approximately £20m of annual recurring income, which is primarily derived from software licence and support renewals. Despite the tough market conditions, K3 continues to sign an encouraging level of major new contracts overall. Sales to existing customers are on an upward trend and are encouraging. As a result of the acquisitions made over the last 12 months and the trend towards spreading payments across the life of the contract, the Group's net debt position at 30 June 2011 is expected to stand at approximately £15.8m (2010: £10.98m). The development of the Group's hosting and managed services offering is progressing well and remains a focus for investment. As these business segments grow, they will increasingly contribute to the Group's long term contracted income and cash flows. The Board's strategy of seeking complementary acquisitions to help to accelerate organic growth remains in place and the Board is continuing to review potential acquisitions which will add contracted, recurring income through the addition of easily integrated customer bases, as well as acquisitions which will further develop the Group's product offering. Preliminary results are expected to be issued in mid September.
http://www.investegate.co.uk/Article.aspx?id=201107050700087569J
Andy Makeham, CEO of K3, said, "I am delighted to have completed the acquisition of Azurri Retail. We continue to strengthen recurring revenues by acquiring new user bases, where we can also offer additional services and upgrades, and Azurri Retail represents an exciting opportunity to acquire a prestigious retail customer base. We look forward to working together with our new customers to ensure the continuing successful delivery of their IT requirements."
Acquisition of Retail Customer Base K3, which supplies enterprise resource planning ("ERP") software, hosting and managed services to the supply chain industry, is pleased to announce the acquisition of the Retail Merchandising Division of Azurri Computer Solutions Ltd ("Azurri Retail"). The consideration for the acquisition is £1.0m, payable in cash on completion. Further consideration of up to £0.5m is payable dependent on increases in gross margin generated by Azurri Retailover the next two years. For the year to December 2010, Azurri Retail generated sales of £1.0m and an underlying profit of £0.4m. Over £0.6m of 2010 revenues were recurring. Azurri Retail's customer base comprises a number of major retailers, including Matalan, JJB Sports, Littlewoods, Holland & Barratt and the National Trust. Azurri Retail represents a highly complementary fit with K3's existing retail software operations, adding further specialist skills, and it will be readily integrated into the Group. Its acquisition is in line with K3's strategy to build recurring revenues and acquire profitable user bases with significant cross-selling opportunities, in particular for its hosting and managed services offering.
http://www.investegate.co.uk/Article.aspx?id=201107040700076600J
In a move to expand its user base and build on its skills, enterprise software provider K3 Business Technology Group* (KBT) has acquired Sense Enterprise Solutions, the provider of Microsoft Dynamics AX enterprise resource planning (ERP) solutions, for 1.2 million pounds. An additional 0.9 million pounds is payable dependent on performance. Separately, the group posted a pre-tax profit of 4.23 million pounds in the half-year ended 31st December 2010, up 8% on the comparable period a year earlier, on revenue 5% greater at 24.67 million pounds. K3 shares moved ahead 3p to 192.5p.
Commenting on the results, Tom Milne, Chairman of K3, said, "We are pleased with K3's performance over the six months to 31 December 2010. Results were supported by the high levels of recurring income the Group enjoys from annual software licence and support renewals across our very large customer base. In addition, the key acquisitions we made between March and June 2010 have helped to move the business forward. We made good progress in the first half with our Managed Services Division and, as we continue to expand, the development of our Managed Services activities will remain a major focus. We believe that there is large untapped demand across our customer base for these services and, as we add new customers across the Group, we are finding there is a ready opportunity to sell our Hosting and Managed Services offering. Looking ahead, we view K3's growth prospects positively. There is a high degree of robustness to the Group's income - approximately £20m (44%) of the Group's annual revenues are recurring and another £19m of sales were generated from existing customers in the last 12 months to December. K3 also generates good cash flows. With the growth opportunities available and our strong financial position, we expect K3 to continue to make good progress over the remainder of the financial year and beyond."
Operational Key Points · Strong sales to existing customers - enhanced Group's margins - K3 customer base now totals c. 1,800 up from 1,500 in 2009 · Good profit performance across both core Software Divisions · Managed Services Division - good progress and significant growth potential - Panacea acquisition (in Q2) added skills, critical mass and recurring income - recurring income run rate at 31 December 2010 increased to £3.28m (2009: £1.37m) - major agreement (in February 2011) with SYSPRO for exclusive provision of hosting SaaS services to SYSPRO customers worldwide - cross-selling opportunities to K3 customers remain significant - acquisition strategy will help to accelerate growth · Post period-end acquisition of Sense (announced today) - will be readily integrated within Manufacturing Software Division - adds c. 40 new customers and recurring software licence income
Financial Key Points · Revenue up 5% at £24.67m (2009: £23.52m) − includes contribution of £1.22m from two acquisitions in Q2 and benefit of acquisitions earlier in 2010. Challenging market backdrop · Adjusted profit from operations*1 up 14% at £6.24m (2009: £5.49m) Profit from operations up 7% at £4.66m (2009: £4.34m) · Profit before tax up 8% at £4.23m (2009: £3.91m) · Good cash flows - operating cash generation of £4.91m, 79% of adjusted profit from operations*1 · Adjusted earnings per share*2 up 13% to 16.9p (2009: 15.0p) Basic earnings per share*³ up 9% to 12.7p (2009: 11.6p) · Increased banking facilities negotiated in September 2010. Net debt at 31 December 2010 of £11.48m (2009: £5.38m, 30 June 2010: £10.98m) after £5.0m drawdown to fund acquisitions. · No interim dividend in line with dividend policy but final dividend expected · Board views full year prospects for the Group positively
http://www.investegate.co.uk/Article.aspx?id=201103070700204110C
You are welcome. This is virtually a no-brainer. One that you can (I think) buy and then only have to check up on every 3 to 4 days. Currently I don't have any spare cash to invest here - but when I do, I shall stick some in my SIPP (presuming of course that it qualifies). Registering for sharecrazy.com newsletters is free, and you will find it to be a window into plenty of good information.
Hi there. Thanks for this link, I really enjoyed this interview, especially as Andy and David Bolton gave me some of their valuable time on the phone last week. Both these guys are very approachable. Honest answers with GSOH! Hang in there with my investment was their view! Thanks again.
I have just watched (on sharecrazy.com - Boardtalk) Tom Winnifrith interviewing Andy Makeham This link may not work (in which case, to watch it you'll have to register with sgarecraz.com first).. http://sharecrazy.com/beta/board_talk Having had no interest before, I have now. The recent set of accounts is an improvement, especially on the debt side, and there are new debt facilities available. (Bear in mind that these accounts are for 18 months though). It looks like growth all the way through to long term. I like it.
Wanted to buy more of this stock cos I feel this company is significantly undervalued. This years results will demonstrate futher growth in a difficult climate. Quick bucks can be made in oil and stocks at the moment (and lost), but many tech companies have low debt and therefore represent safe medium term investment. This stock has dried up with the mm's. Hopefully more sellers will appear in the near future. AGAIN, HAS ANYONE AN OPINION ON THIS STOCK?
K3 appears to have a solid growth pattern. Current year activity seems promising! Can anyone please add some meaningful comments. Thanks.
big contract win http://www.investegate.co.uk/Article.aspx?id=200903191259501442P
Im in for some more today :)
Hopefully these should be up around the 180 mark quite soon