K3 Business Technology Group Regulatory News (KBT)

25 Jan 2010 07:00



KBT 

K3 BUSINESS TECHNOLOGY GROUP PLC

('K3' or the 'Company')

TRADING UPDATE

K3, which supplies and supports Microsoft-based Enterprise Resource Planning software for the supply chain industry, announces the following update on 2009 trading prior to the announcement of its interim results in early March. It should be noted that, following the change of K3's financial year end (from 31 December to 30 June), the unaudited interim results will cover the 12 month period to 31 December 2009.

The Directors are pleased to report that results for the 12 month period are expected to be in line with market expectations. In a significantly tougher trading environment, the business has performed well, supported by high levels of predictable income from software licence renewals and maintenance income. Additionally, the level of new business wins has been very encouraging, with both the Retail Software Division and Manufacturing Software Division closing a significant number of contracts. 

In total, 52 new name contracts were secured by K3 in 2009, against 47 new name contracts in the comparable twelve month period last year. The average order size has also increased substantially in both Divisions and, significantly, a number of these new business wins were secured against competition from SAP, IBM and Oracle. Those contracts signed in the last quarter of 2009 will also benefit K3's trading results in the period ending 30 June 2010 (and beyond) when the associated implementation income comes through.

The Group's cash generation remains strong and cash collections in the year were ahead of expectations. K3's net debt position at the 31 December 2009 is therefore expected to be better than market expectations and to show a substantial improvement on the net debt position last year (2008: £13.0m).

The pipeline of new business across both Divisions remains encouraging.

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