K3 Business Technology Group PLC on Wednesday said results from the first half of its current financial year were in line with management expectations.

Shares were down 4.5% at 127.50 pence each on Wednesday morning in London.

K3 Business Technology is a Warwickshire, England-based software company focused on the fashion industry.

For the six months that ended on May 31, the company said revenue declined by 4.8% to £19.9 million from £20.9 million a year before, while pretax loss from continuing operations narrowed to £2.8 million from £3.7 million.

Gross margin increased to 60% from 58%, reflecting improved gross margin in both K3 products and third-party solutions, the company said. Gross margin on K3 products widened to 80% from 76%, while the margin on third-party products improved to 50% from 47%.

Adjusted earnings before interest, tax, depreciation and amortisation amounted to £994,000, up 13% from £880,000 the year before.

Chief Executive Officer Marco Vergani said: ‘We are executing against the new growth strategy that we established in Q4 last year and have made encouraging progress in the first half. The second half of the financial year is typically stronger than the first, with substantial cash inflows due from software licence and support and maintenance contract renewals.’

Net cash stood at £1.4 million as at May 30, down from £4.4 million on November 30. ‘Financial year-end position is expected to close significantly higher, reflecting strong seasonal weighting of cash inflows,’ K3 explained.

Looking ahead, K3 said it remains confident of its long-term strategic direction.

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