AIM: KBT

K3 BUSINESS TECHNOLOGY GROUP PLC

("K3" or "the Group" or "the Company")

Provider of business-critical software solutions focused on fashion and apparel brands.

Board Changes

K3, which provides business‐critical software solutions focused on fashion and apparel brands, announces that Marco Vergani, Chief Executive Officer, is stepping down from the Board and the Company, and that Tom Crawford, Non-executive Chairman, is taking up the role of Executive Chairman. These Board changes, which take effect today, come about as a result of the implementation of a new management structure, with the Group's unit heads reporting directly to the Board.

The management changes create new reporting lines and devolve greater responsibility to the leadership teams within the Group's businesses, which are separately managed and respectively address different market sectors. It reflects the Board's strategy to further simplify operations, more effectively address the opportunities within market sectors, and to drive shareholder value.

The Group's overall performance since August, when the Company last commented on trading, remains on track to generate an adjusted operating profit in line with the market forecast. The final quarter of the financial year typically generates significant profit and cash flows from annual renewals of software licences and support and maintenance contracts. This remains the case in the current financial year ending 30 November 2023, and the level of renewals is expected to be at c. 98% as in previous years. 

The Board remains focused on the transition to higher quality recurring earnings, while continuing with cost discipline and operational simplification. The cost base at Global Accounts is being brought into line with the reduction in activity, as previously reported in August, while the uptake of the Group's flagship K3 Fashion product remains strong with 25% growth to date in annualised recurring revenue across strategic fashion products. 

The Board would like to place on record its thanks to Marco for his contribution to K3, and in particular his role in resetting the Group's strategic direction and goals, including at the Fashion business unit and his decision on, and delivery of, the current decentralisation policy. He leaves with the Board's best wishes for the future. 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

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