K3 Business Technology Group PLC on Wednesday said revenue for the first half of the financial year grew marginally amid divisional improvements, but noted its bottom-line was hurt further by higher costs.

K3 is a Manchester, England-based business-critical software solutions provider focusing on fashion and apparel brands.

For the six months to May 31, K3 said pretax loss from continuing operations widened to £2.9 million from £2.8 million the year before, as administrative expenses grew by 1.6% to £13.1 million.

Revenue grew slightly by 2.0% to £20.3 million from £19.9 million a year prior due to ‘strong growth’ in its Third-party solutions division as well as improved contribution from strategic products in its K3 Products division.

Adjusted net cash at May 31 more than doubled to £2.9 million from £1.4 million during the same period the previous year.

Looking ahead, K3 said it expects its net cash position to strengthen in the second half of the year. Nevertheless, the company expects ‘more subdued’ activity in its Global Accounts division, but has ‘taken action to reduce costs.’ In addition, the company said it is targeting growth in annualised recurring revenue of around 30% for the year ending November 30.

The company also added its Third-party Solutions division is expected to deliver high cash inflows in the second half of the year as software licence maintenance renewals come through.

Chief Executive Officer Marco Vergani said: ‘Our healthy balance sheet underpins the improvements that we are making to the business. We remain focused on our high-margin growth opportunities, cost discipline and adjusted net cash as we continue to move to higher quality earnings.’

Shares in K3 were trading flat at 123.00 pence each in London on Wednesday morning.

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