Microsoft Dynamics partner K3 has issued a trading update for the second half, warning that sales will be "significantly" below market expectations, after seeing major deals fall through.
K3 said it had "started confidently" in H2, but then a major new contract failed to materialise and that a "large customer" had entered into administration. In addition, some clients were now buying software licences at a slower pace than anticipated
The company now expects its adjusted operating profit to be around £1.5m for the year, compared to £4.6m last time. And net debt is expected to go up to £2.2m compared to £0.6m last year.
The retail software and services specialist said: "Notwithstanding the reduced financial performance expected this year, the company has continued to make encouraging strategic and operational progress.
"In the second half, K3 was included in Microsoft's top 20 independent software vendors globally, with 'K3 I Fashion' selected as Microsoft's recommended solution for the fashion vertical. This strong validation stands K3 in very good stead in its markets and the pipeline for this product remains strong and of high quality."
But after the trading update, K3's share price dropped by over a quarter.
