LONDON (ShareCast) - Business software group K3 saw profits surge last year as the benefit of three acquisitions kicked in.

Profit before tax rose by 43% in 2007 to £3.68m with earnings per share increasing by 41% to 13.4p. Revenues rose by 25% to £34.2m.

Both legs of the business, the Retail Software Division and the Manufacturing Software Division, performed well, K3 said.

The three acquisitions, two in manufacturing software and one in retail software made partial contributions to this year's results but, more significantly, greatly enhance prospects for the group for 2008 and beyond, it added.

"Recurring revenue, which derives from licence fee renewals and associated support, now totals approximately £13.8m on an annualised basis and represents a highly predictable income stream," chairman Tom Milne said, adding that prospects for 2008 are encouraging with the sales pipeline at record levels.

There is a final dividend of 0.5p against nothing last year.

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