K3 said the reseller wing, which sells Microsoft ERP and CRM wares, turned over £21 million in its fiscal ’19, accounts for which have been postponed as mentioned above. In that year it generated an operating loss of £3 million.
The parent firm added: “Given the current uncertainties created by the coronavirus crisis, this UK subsidiary is expected to generate further significant negative earnings before income tax, depreciation and amortisation and cash outflows in the year to 30 November”.
This may not be the end for the reseller, with K3 saying it “will seek interest in the sale of the business and/or its assets”. The decision to get rid of the UK arm has “no effect” on the group’s Microsoft Dynamics biz outside the UK, the company added.
Meanwhile the company has obtained a £6 million loan from Barclays and two shareholders and said it was delaying publishing results for the year to 30 November.
The cash funding is going to be used to “strengthen the group’s liquidity position during this period of unprecedented disruption caused by the Coronavirus pandemic”, K3 said.