K3 Business Technology Group Regulatory News (KBT)

KBT

K3 BUSINESS TECHNOLOGY GROUP PLC

("K3" or the "Group")

IT solutions supplier to the supply chain industry

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.

*Adjusted profit from operations is calculated after adding back the impact of amortisation of acquired intangibles and acquisition costs.

Enquiries