Acquisitions boost profits at retail supplier K3
12:24PM - Wed 6th July 2011
A host of acquisitions by supply chain and retail IT solutions supplier K3 helped the business increase sales and adjusted operating profits in the year to June 30th 2011, it was announced in a trading statement this week.
Since November last year K3 has completed the takeover of a number of IT firms, such as Panacea, Sense Enterprise Solutions and Clarita Solutions, which have been reported as performing well under their new ownership.
K3 also said it has benefited from around £20 million of annual recurring income, primarily derived from software licence and support renewals.
Earlier this week the group announced the acquisition of the retail merchandising division of Azurri Computer Solutions in a deal that could eventually be worth £1.5 million, depending on Azurri’s performance in the next two years.
The takeover significantly increases K3’s presence in the retail industry as Azurri’s customer base comprises a number of major companies operating in the sector, including Matalan, JJB Sports, Littlewoods and Holland & Barratt.
Andy Makeham, CEO of K3, said: “I am delighted to have completed the acquisition of Azurri Retail.
“We continue to strengthen recurring revenues by acquiring new user bases, where we can also offer additional services and upgrades, and Azurri Retail represents an exciting opportunity to acquire a prestigious retail customer base.”
This acquisition activity has had an impact on the group’s bottom line, with recent cash outlays contributing to debt increasing from £10.98 million at the end of the last financial year to £15.8 million today.
However, the company says it will continue to seek other strategic purchases to help accelerate its organic growth, as well as developing its hosting and managed services offering in the year ahead.
K3 is scheduled to announce full-year preliminary results in mid-September.