When Will K3 Business Technology Group plc (LON:KBT) Become Profitable?

K3 Business Technology Group plc's (AIM:KBT): K3 Business Technology Group plc, together with its subsidiaries, provides integrated business solutions to retailers, manufacturers, and distributors in the supply chain sector primarily in the United Kingdom. The UK£73.42M market-cap company announced a latest loss of -UK£8.79M on 30 June 2017 for its most recent financial year result. Many investors are wondering the rate at which KBT will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for KBT.

KBT is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2017, before generating positive profits of UK£200.00K in 2018. So, KBT is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which KBT must grow year-on-year. It turns out an average annual growth rate of 104.01% is expected, which is rather optimistic! If this rate turns out to be too aggressive, KBT may become profitable much later than analysts predict.

Given this is a high-level overview, I won’t go into detail the detail of KBT’s upcoming projects, though, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. KBT has managed its capital prudently, with debt making up 28.38% of equity. This means that KBT has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of KBT which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at KBT, take a look at KBT’s company page on Simply Wall St. I’ve also put together a list of important aspects you should look at:

1. Valuation: What is KBT worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether KBT is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on K3 Business Technology Group’s board and the CEO’s back ground.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.