K3 Business Technology Group shares dropped 4.4% to 127.5p in early morning trading on Wednesday following a slide in revenue to £19.9 million in HY1 2022 against £20.9 million the year before.
K3 Business Technology confirmed a loss for the financial period of £2.7 million from a profit of £5 million in the previous year.
The software solutions group announced a loss from continuing operations of £2.8 million from £2.5 million the last year, in line with management expectations.
The loss was related to depreciation and amortisation of acquired intangibles, exceptional reorganisation and acquisition costs and share-based payment charges for a total of £3.6 million compared to £3.4 million in HY1 201.
The company further mentioned a pre-tax loss from operations of £2.5 million, remaining flat year-on-year, alongside a pre-tax loss from continuing operating of £2.7 million from £3.6 million.
K3 Business Technology highlighted an adjusted EBITDA uptick to £1 million from £900,000, along with a gross margin rise to 60% against 58%, reflecting higher margins in K3 Products and Third-Party Solutions.
The firm also noted to acquisition of sustainability-focused software developer ViJi in January 2022, broadening its offering in supply-chain transparency and traceability, and increasing operational investment by £200,000.
“K3 Products has clear growth opportunities in its fashion and apparel markets and we are focusing on three critical areas for customers – Sustainability, Omni-channel and Business Insights. The acquisition of the Sustainability-focused software developer, ViJi, in the period, will enhance our offering here,” said K3 Business Technology Group CEO Marco Vergani.
“Third-party Solutions performed well and remains a significant cash generator. We are investing in products and delivery resource to support growth.”
“The second half of the financial year is typically stronger than the first, with substantial cash inflows due from software licence and support and maintenance contract renewals. While there are increasing macroeconomic uncertainties, we remain confident of our long-term strategic direction and will continue to focus on growth, cash and costs.”
K3 Business Technology confirmed net cash at £1.4 million against £4.4. million year-on-year, with the firm expecting its FY 2022 financial position to close “significantly higher” as a result of seasonal weighting of cash inflows.