On paper it looks like it has, even if the market doesn't appear to have noticed – shares in K3 Business Technology (KBT:AIM) have barely moved today, nudging just 1.5p up to 359p. Adalsteinn Valdimarsson is stepping up from non-executive director, a role he has had since joining the board on 11 July.

With 20-odd years of software industry experience, much of it in the retail space, plus plenty of management savvy around the Microsoft Dymanics platform, he looks an ideal fit, ticking the two most important check boxes for KS.

That he is just 46 also suggests that Valdimarsson will have the ambition to help the business take the next big steps in its development – he's got time on his side. You can have a spin through his full biog here, from the K3 website, and he'll officially take charge on 1 October.

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Supplying a host of third party software and systems plus a growing armoury of inhouse development solutions, K3 has its finger on the pulse of an increasingly multi-channel retail world.

Shares has previously explained, first in April, again in July. Valdimarsson's appointment as CEO is the apparent last track in a boardroom game of musical chairs at K3, flagged in last week's full year figures.

Change at the top - K3

Lars-Olof Norell (interim chairman to non-executive director)

David Bolton (CEO to executive chairman)

Adalsteinn Valdimarsson (non-executive director to CEO)

'This looks like a really positive appointment for K3 given Valdimarsson’s pedigree in both the retail sector and with Microsoft,' states Ian Spence today, founder and chief analyst at the IT analysis boutique Megabuyte.

Teasingly, it'll be interesting to see if Valdimarsson has any strategic tricks up his sleeve. Perhaps he'll up the ante in retail making its manufacturing bit non-core, even a possible sale candidate. Time will tell.

On line shopping on tablet screen, business, E-commerce, technology and digital marketing background

There's always a but though. 'On more down to earth matters, Valdimarsson will also need to focus on K3’s poor cash conversion of late, which has been a major drag,' cautions Megabuyte's Spence. The analyst flagged a large increase in working capital (£5.8 million) and ongoing high levels of capitalised R&D spend (£4.6 million) which impacted conversion in the 12 months to 30 June 2016.

'The working capital build-up was blamed on a very busy trading period coming up to the year end, but is the third year in a row of very weak conversion,' Spence spelled out on the day of the results. Still, FinnCap analyst Andrew Darley remains comfortable and confident enough about K3's prospects to hammer home his 465p target share price, implying near-30% upside.


Issue Date: 23 Sep 2016