K3 Business Technology Group Regulatory News (KBT)

AIM: KBT

K3 Business Technology Group

("K3" or "the Group")

Pre-close Trading Update

K3, which provides and supports software, hosting and managed services to the retail, manufacturing and distributions sectors, provides the following update on trading for the financial year to 30 June 2015.

The Group has continued to progress well in the second half and full year results are expected to be broadly in line with market expectations with the Dutch market and the weakening euro having affected performance. Net debt at the year end shows a significant improvement against market forecasts, reducing to approximately £12.10m (30 June 2014: £13.63m). This included the cash payment of £1.75m for the acquisition of hosting business, Willow Starcom Limited, in the fourth quarter. Recurring income (from software licence renewals, support contracts and hosting) remains high and is expected to show a year-on-year increase.

The Board is pleased with the progress K3 is making with its intellectual property ("IP") growth strategy which is focused on the development and sales of its own IP. There has been significant interest in K3 IP, with encouraging progress in the development of global channel partners. This is a key component in the Group's strategy to expand sales of new and existing K3 products. K3's hosting revenues have also grown significantly over the period.

The Board expects the full year results to be issued in mid-September.

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