StockMarketWire.com - K3 Group reported an adjusted pre-tax loss of £3m for the 17 months to Nov. 30, compared with a adjusted pre-tax profit of £8.8m the previous year, amid significant charges related to a comprehensive review and reorganisation programme.

The fall in profit was driven largely by an increase in exceptional costs to £8.9m - £4.5m of which is non-cash - from £1.0m the previous year. Exceptional costs mainly reflected organisational and management changes across the group and an impairment of development costs (non-cash).

The firm said the exceptional reorganisation costs will deliver savings of £5.0m on an annualised basis and the impairment of development costs was taken against products that are no longer core to the group's strategy

Revenue for the 17 months was £118.2m, up from £89.2m as recurring income rose by 48.7% of total revenue, while own IP revenue increased to 19.8% from 13.9% of total revenue.

Adjusted loss from operations was £1.6m, compared with an adjusted operating profit of £9.5m the previous year.

Adalsteinn Valdimarsson, Chief Executive Officer of K3, said: 'We have implemented significant changes at K3 over the last 18 months, aimed at placing the Group on a better footing for long-term revenue and profit growth and improved cash generation. The Group's operations are now more streamlined and integrated, and we have refocused our IP development roadmap. While the process has involved cultural change and substantial one-off costs, we are seeing the benefits come through.'

'We have strong offerings in our chosen markets across the supply chain, including our new cloud-native IP. Since the period end, trading has been encouraging, especially for own IP sales. While there is still work to be done, we remain confident about prospects for continuing progress.'


At 9:18am: [LON:KBT] K3 Business Technology Group PLC share price was -4.5p at 169p



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