K3 Business Technology Group Regulatory News (KBT)

AIM: KBT

K3 Business Technology Group plc

("K3" or "the Company")

Trading Update

K3, which provides and supports Enterprise Resource Planning software, hosting and managed services to the retail, manufacturing and distribution sectors, is pleased to provide the following update on trading in the first half of its current financial year ending 30 June 2015.

Trading in the first half of the year has been in line with management expectations, supported by an increase in sales of approximately 20% against the same period last year. This very encouraging revenue growth mainly reflects continuing progress with K3's new flagship Microsoft Dynamics AX solution, with first sales also coming through via K3's international reseller channel in Europe, Australasia and North America. In addition, as previously reported, K3 is also seeing improving sales in its existing software products, including SYSPRO and Microsoft Dynamic NAV although the Dutch retail market remains difficult.

K3's investment programme in its Microsoft Dynamic AX product continues as does its focus on expanding its international reseller channel and developing its SYSPRO business. The Company's recent accreditation as a member of Microsoft's Global Independent Software Vendor ("GISV") programme, one of only 25 companies globally to be included in this programme, is another significant boost to K3's plans to develop broader channels to market for its new flagship product. 

Net debt at 31 December 2014 will show the reductions associated with the collection of annual licence fees in this period, albeit that the strong end of period trading has resulted in further increases in working capital, which are expected to reverse in the second half of the year.

Half year results are expected to be announced in mid-March when an update on current trading will also be provided. As stated in the Company's Annual Report, K3's performance across its activities, including hosting and managed services, will be reported by reference to its industry sectors, retail, manufacturing and distribution, and its global intellectual property.

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