K3 Business Technology Group has warned that that EBITDA (pre-exceptional items) for the full year will be approximately £3.5m less than the originally anticipated.
K3 says it has made important progress over the first half in its operational reorganisation but trading in December, a key selling period, has not been as strong as expected, reflecting a softening in market conditions.
An update says: "Given the lengthening sales cycles around larger deals and the accelerating industry shift to cloud-based consumption, management now believes it prudent to expect that EBITDA (pre-exceptional items) for the full year will be approximately £3.5m less than the originally anticipated."
The group says the operational reorganisation, announced in the autumn, is largely complete and has established a more unified and streamlined operating structure across the Group. This will enhance sales opportunities and deliver cost efficiencies. The associated exceptional costs are expected to amount to approximately £3.0m, with the annualised future benefit likely to exceed £3.0m. The Board will continue to look for additional efficiencies.