K3 Business Technology Share Discussion Threads

[cfro] 31/3/2011 18:29

With those earnings being upgraded all the while the PE continues to fall here. I make the PE about 7, which is way too much on the low side.

[cb7] 31/3/2011 09:16

Agree that around 240 may be a near term target, based on this years earnings. However, a 50% rise from here is clearly on the horizon with next years eps forecast around 28. They keep trading ahead of estimates, leading to upgrades. If they bed the acquisitions in satisfactorily, I think nearer £3 is do-able.

[cupra kid] 30/3/2011 20:14

The chart also looks like breakout could be on the cards soon.

[philo124] 30/3/2011 20:07

Thanks a lot; these are ahead of Edison's; 265p target on forward P/E OF 9.

[interceptor2] 30/3/2011 19:58

New forecasts from Canaccord yesterday

2011 pbt = 8.2m and eps = 24.6p
2012 pbt = 9.8m and eps = 29.5p

Means a per of 7.8 and 6.5 respectively, still clearly undervalued imo.

ic2....

[interceptor2] 30/3/2011 09:29

Snap 240p is my target also, we are in good company. See the summary from Edison yesterday.

ic2........

Valuation: Undemanding, despite recent rise

At 8.0x FY11 and 6.9x FY12 EPS, K3 trades at a discount to both the UK software and IT services sectors. We believe that as K3 integrates recent acquisitions and starts to generate cost and revenue synergies (in particular selling Managed Services to the existing customer base), the stock could trade up to nearer 10x EPS. Our discounted cashflow analysis values the stock at 236p (25% upside).

[philo124] 30/3/2011 09:21

Got in this morning; modest i know, but it's a start. My target fwiw 240p

[davebowler] 29/3/2011 11:56

Edison view;

K3 Business Technology Group - UK retail acquisition PDF download Click for report

K3 has acquired a Microsoft Dynamics NAV provider specialising in Retail and Distribution for a cash consideration of £0.8m. We estimate the deal will boost UK Retail revenues by 12% in FY12 and should be earnings accretive. The deal also gives access to 70 customers to which K3 could sell its Managed Services.

K3 provides Microsoft- and Sage-based ERP solutions and managed services to SMEs in the retail and manufacturing sectors.

Year
End Revenue
(£m) PBT
(£m) EPS
(p) DPS
(p) P/E
(x) Yield
(%)
12/08 37.6
5.9
17.9
0.50
10.5
0.3
06/10 59.8
7.6
23.4
0.75
8.1
0.4
06/11e 53.0
8.3
23.7
0.60
8.0
0.3
06/12e 61.8
9.8
27.4
0.60
6.9
0.3

K3 Business Technology Group is a research client of Edison Investment

[angler] 26/3/2011 08:35

After hours announcement yesterday:

TIDMKBT

RNS Number : 6846D

K3 Business Technology Group PLC

25 March 2011

AIM: KBT

K3 Business Technology Group plc

("K3" or "the Group")

Announces

Acquisition of Clarita Solutions Ltd

K3, which supplies and supports Enterprise Resource Planning ("ERP") software to the supply chain industry, is pleased to announce the acquisition of Clarita Solutions Ltd ("Clarita"), which provides Microsoft Dynamics NAV ERP solutions ("NAV") to the retail and distribution markets. The consideration for the acquisition is GBP0.82 million, payable in cash on completion, and K3 is also assuming certain financial obligations to a maximum of GBP230,000.

For the year to 31 December 2010, Clarita generated sales of GBP3.1 million and an underlying operating profit of GBP0.25 million. Approximately one third of revenues are recurring and the business has circa 70 customers.

Clarita represents a highly complementary 'bolt-on' acquisition, which will be readily integrated into K3's existing operations. As well as delivering NAV solutions to retailers, Clarita is also an established distributor of K3's Pebblestone fashion distribution software solution.

Andy Makeham, Chief Executive of K3, said,

"Clarita is a well-established NAV reseller in the UK focused on the same market sectors as K3. It therefore represents a highly complementary acquisition, which we can readily integrate into our existing operations. Its addition brings us GBP1 million of recurring revenues and another 70 customers to whom we can offer further software services and solutions, including hosting."

[spaceparallax] 07/3/2011 11:05

Agreed, they look pretty solid and another acqn. Do hope that they pause a little on the acqn trail to allow bed-in and financial balance.

[cfro] 07/3/2011 09:35

Agree, good interims and another great acquisition which makes 'sense'! LOL :o))

[interceptor2] 07/3/2011 08:21

Good interims today that were inline with what I was expecting. Should see more benefits from recent acquisitions in H2.

ic2........

[simon42] 28/2/2011 20:16

I think we're due an interim next Monday or there abouts?

[interceptor2] 21/2/2011 14:10

Thanks for posting, very interesting.

I didn't know he held KBT, he sounds very upbeat and what he says makes alot of sense. I agree that just because they have almost doubled in the last year doesn't make them a sell, like him I see KBT as a buy still. A per of 8 and 6.9 looks very reasonable for company growing so quickly, the PEG is still only 0.4 and 0.4 respectively.

Since first buying KBT i have added twice more with 167p being the most recent, and would like to add again at the next update if it's as positive as I expect.

Regards ic2......

[interceptor2] 15/2/2011 13:21

From HB Markets yesterday

K3 Business Technology (KBT, 186.5p, £48.06m)

K3 Business Technology (KBT, 186.5p, £48.06m) has announced an agreement which will see it provide hosting SaaS exclusively world-wide to SYSPRO, a leading developer of ERP solutions for the manufacturing sector and has 14,000 customers world-wide. The agreement will see the SaaS service offered across 60 countries via its partner network. We maintain our BUY recommendation with a 237p fair value. (Julian Tolley)

Recommendation: BUY

[simon42] 14/2/2011 21:02

Last time KBT was bouncing up against 200p was back in 2007. It may be a tricky pivotal point to beat. I'm thinking we'll have to wait for the next update in a few weeks to get up and over 200p.

[cfro] 14/2/2011 18:52

Thanks again for all the info IC2. Once again i fully agree that this should bring about some good opportunities for KBT with the cloud computing angle. Had a job tracking the price on this today and many other shares too and my broker are still having problems. :-(

[saucepan] 14/2/2011 13:17

Agreed, IC2

Chart looks ripe for breakout, too, after a healthy consolidation.

[interceptor2] 14/2/2011 12:56

"This expands the potential customer base for SYSPRO hosting from the current 500 in the UK to the 14,000-strong global customer base"

I'm not sure what percentage of the 14,000 customers K3 could tap into, but I would say this is a pretty significant announcement.

Regards ic2.........

[interceptor2] 14/2/2011 12:51

Summary of todays deal just released by Edison. see below....

K3 has signed an agreement to become the exclusive hosting service provider to SYSPRO on a global basis. This expands the potential customer base for SYSPRO hosting from the current 500 in the UK to the 14,000-strong global customer base and should accelerate growth in the Managed Services division while growing recurring revenues from the current 40% level.

K3 has announced that it has signed an exclusive agreement with SYSPRO to provide its hosting service on a worldwide basis. K3 is SYSPRO's exclusive distributor in the UK, with 500 of K3's 2,000 customers using SYSPRO. Since the DigiMIS acquisition, K3 has offered hosting of SYSPRO to its customer base on an ad-hoc basis. This agreement gives K3 the ability to offer its hosting services to the 14,000-strong global customer base across the SYSPRO partner network.

SYSPRO's new hosted solution, SYSPRO BusinessLive, can be deployed on an on-demand (subscription) basis or upfront licence fee basis. In addition to providing the hosting service for BusinessLive, K3 will be able to market this solution to new customers in the UK. The subscription service is likely to appeal to smaller customers for whom upfront licensing is prohibitive on a cost-basis and therefore should enable K3 to expand its SYSPRO offering outside of its usual mid-tier customer base.

[interceptor2] 14/2/2011 12:36

When KBT last reported UK revenue accounted for 75.2%, I always like to see more of a geographic spead.

After todays news with a agreement with Syspro to market to 60 countries, plus the Pebblestone (Holland) acquisition last year which brought selling opportunities to another 20 countries. We could see the start of a shift in Geographic spread this year.

cfro - BTW at 13:20 the share price was 191.5p +5p with 15k sells against 20.6k buys, spread = 190p - 193p. Just incase you are still flying blind.

Regards ic2.........

[spaceparallax] 14/2/2011 09:34

Well done KBT sounds potentially very valuable.