K3, which provides mission‐critical business software, cloud solutions and managed services, is pleased to provide the following trading update.
Trading in the second half of the financial year to 30 November 2020, seasonally the Company's stronger half, has continued to be in line with the second quarter and management expectations, with the own IP and Global Accounts businesses showing particular resilience. October is an important month for annual software licence and maintenance contract renewals, and these have progressed well with renewal rates tracking at normal high levels.
Management continues to focus strategically on the significant opportunity to expand own IP sales, particularly of the K3|imagine platform and has made a number of new appointments to strengthen the senior team. The Board is also actively exploring a range of options to simplify the Group structure.
As previously announced, management expected net bank debt (drawdown plus cash balances net of overdrafts) to be £6.0m at the end of September, historically the point of peak borrowing for the Company. Actual net bank debt at 30 September 2020 was £6.2m, and cash balances since then have grown strongly with annual renewal receipts.