K3’s H1 2017E results are in line with January’s trading update and reflect the sales slippage in December and continued investment. K3 states that deals expected in H1 are now starting to come through and highlights a £2 million-plus contract with the British Heart Foundation. It also says that the operational reorganisation is largely complete and that changes have been implemented to create a more streamlined platform. The announcement reports an increase in recurring revenues while the move towards higher own-IP sales and cloud delivery continues. We don’t believe that a difficult first half has affected the ongoing strategic refocus. We note that news of a strong pipeline and deals coming through are reflected in the Board’s optimism in future prospects. Following changes in January, we make no further alterations to estimates today.