K3 Business Technology Share Discussion Threads

[philo124] 12/3/2013 07:09

Bombed Out.

[snatander] 08/2/2013 00:05

reckon one more profit warning to go yet

[sunray5] 26/1/2013 13:39

When could they get first sales on the retail solution built around Microsoft's latest AX technology?

[snatander] 26/1/2013 13:29

Comment at 190p


Snatander 18 Sep'12 - 08:53 - 872 of 928 0 0 edit


reckon this will touch 120p soon the way it is diving, debts are too high imago whioch put bidder off

Stegrego 18 Sep'12 - 09:00 - 873 of 928 0 0

I think you are living in your dream world still Snatander.....




QED.

[snatander] 22/1/2013 21:26

When will they refinance their massive debts? Interesting to see if banks will get their pounds of flesh

[philo124] 22/1/2013 10:19

The forward p/e is 4.

[sidam] 22/1/2013 10:03

Current EPS. The house broker and Edison have published sine the trading update. As would be expected, both are going for a sharp fall in EPS for this year = 19.5p and 19.2p respectively. You can work out the PE but it is not 4.1.

Both are projecting some recovery for June 2014 with EPS of 26.3p and 26.7p.

If those numbers are correct, in six months the current year PER will be well under 5. That probably is too low, but there is still lots of uncertainty about the numbers for 2014.

[philo124] 21/1/2013 18:52

GHF, thanks, you been proved correct already.

[glasshalfull] 21/1/2013 17:57

I like the management here but unfortunately the business is operating in a tough sector at present with c.40% exposure to retail as Tom mentions.

Where I disagree is that he mentions that they are presently a recovery buy.
I think its far too early to put ones hard-earned in here given that;

* EPS has been reduced by 36% this year and 26% next
* Despite putting itself up for over a 12 month period no bidder "appears" to have thought KBT is worth north of £2...clearly upside therefore limited in short term, especially with profit warning
* Managed Services act as a profit drag at this early stage as the business gears up to take on contracts
* Company will require to refinance by Dec 2013
* Operating margin falling
* Debt c. £15m...vs market cap £31m

I don't anticipate the market will rate this much higher at present with falling profitability, margins & gearing.

Sure they are cheap on a PER basis, but factor in the debt & PER doesn't look so great. Also the update from TechMarketView Indicated that they thought that 2013 could be equally tough...so I would argue that forecast earnings are not certain in the current environment.

I believe there will be a time & opportunity to invest but thought it worthwhile to provide a counter argument to the more bullish tone of the broker note & Tom's article.

My views FWIW.

Regards,
GHF

[philo124] 21/1/2013 16:02

Edison just out with note; forward p/e 4.1.

[felix99] 18/1/2013 14:51

well at least sell some Stegr. I sold a few at £2 but not nearly enough - too greedy hoping for 230 ish

[stegrego] 18/1/2013 14:41

Thankfully I sold out the remainder of my holding last week, due to constant drops and wanting to take at least some profit from this!!

Reminder to self - next time someone makes an offer for a company SELL and move on!!

[glasshalfull] 18/1/2013 13:37

I take no pleasure in my earlier post & highlighted concerns.

The techmarketview is quite telling though & indicates that,

"We fear that problems could extend into the next financial year..." & therefore I reckon it far too early to go bottom fishing until there are signs of stabilisation or indeed if managed services begin to take up the slack.

GLA

Regards,
GHF

[orange1] 18/1/2013 10:39

This is the take of Techmarketview:

K3 issued a pre-tax profits warning this morning, citing a drop in retail sector business and investment in its global retail Microsoft AX-based solution as the reasons why it will come in below market expectations over the full year (to June 30 2013). The early warning signs have been there for some time, from the for sale/not for sale switch (see here), to the pre-AGM statement in December that warned of trading environment difficulties leading to deferred spending (see here).

CEO Andy Makeham told us that three already deferred deals that were expected to close in December 2012 have rolled into H2. There is no certainty that they will come in by June (and even if they did they would not generate service revenue in the period), hence the warning. There are no indications that the prospects are buying elsewhere though. As he pointed out, the combination of slow sales due to overall problems in the retail sector (witness Jessops, HMV, Blockbuster), plus higher costs as the company invests to extend the AX platform with its own IP and adds AX resources (c26 AX developers/consultants on staff vs c2), have resulted in a double hit. While development of the AV platform is marginally behind schedule, the vast majority of the problem has been caused by the hiatus in UK retail sector spending. With the exception of the UK and Dutch retail aspects, business in other areas of K3's operations, and international sales, are strong says Makeham.

We fear that problems could extend into the next financial year given the state of the retail environment in general. And although K3's early AX extensions are emerging and the company has a few customers implementing and lined up, it will be a year before the complete offering is available. While the pipeline has grown from around £9m a year ago, to c£16m six months ago and now stands c£27m, it could be hard work converting them in the current environment. Meanwhile K3 is pushing ahead, accelerating investment to get the full suite to market and focussing on the retail segments that are still performing, like the discount retailers and pawnbrokers.

[britishb] 18/1/2013 10:15

Yes, well tx Felix. Trust you the same.

My prob with the statement is that they give indication of the scale of the warning. They must be running the biz with a plan (which will obviously change over time). If their current plan targets xyz profitability why not give us a clue what that is? Or a range of outcomes?

Do they think profits will be £2.50 or £10million? We are given no idea at all.

[felix99] 18/1/2013 09:45

Hi British B - long time no speak.Trust you are well.

I suspect however they have given no precise guidance becasue they havent a clue what the outturn will be . All depends on timing of deals etc wholly out of their control it seems. I dont like businesses which are just at the whim of the market they are in. They are trying to build recurring revenue but it still seems the figures are lumpy depednent on timing of new contracts.

From what I heard of the talks - there was plenty of interest but no one wanted the retail bit. Now we know why ..........

[philo124] 18/1/2013 09:12

I think they have forgotten that for a while.

[britishb] 18/1/2013 09:04

You're right Felix. In fact the finals pretty much flagged a warning for the first time "Board sees new financial year as one of investment - in Microsoft Dynamics AX and Managed Services - to drive recurring revenues - financial benefits to come through in 2013 and beyond".


The latest "pre-tax profits below current market forecasts" isn't much use to anybody. Why can't they give some idea of their current forecasts?

Yet another board who appear to have forgotten who owns the company!

[felix99] 18/1/2013 08:39

Not necessarily leaked - the writing was on the wall from that last update. In fact to me it was a veiled profit warning as it was. I dumped my last few then and was surprised to see it bounce to 160p. No idea why I didn't try to short it.

One of most well sign posted warnings I have seen. Sorry for holders.

Lets hope things pick up beofre they have to renew banking facilities ortherwise the whole pack of cards could come down

[farnese] 18/1/2013 08:14

Disgusting behaviour by the BoD for such a leaked profit warning

Going to be a long long time before any recovery here.

[dpmcq] 18/1/2013 07:55

100% agree phil - leaked news

[philo124] 18/1/2013 07:28

Now the rest of us know why.

[farnese] 16/1/2013 21:37

Not surprised to see it down again