- Core GK/Retail business grows by over 27%
- Breakthrough in US market
A significant portion of that growth has come from the core business related to the GK/Retail solutions, which increased by an impressive 27%. One important development in the 2018 financial year was the company's breakthrough in the USA, a key market where GK Software won four new customers including two of the country's top 20 grocery retailers. This trend is continuing in 2019, with a further two new US customers already having been signed up, plus the company has added a new South American cloud customer to its portfolio this year.
GK Software also made significant investments to strengthen its market position in the 2018 financial year, particularly in terms of expanding the cloud capabilities of the GK/Retail solutions and integrating its recently acquired expertise in artificial intelligence and mobile solutions into its product portfolio. Besides this higher level of product investment, the main causes of the earnings before interest and taxes (EBIT) – at just €1.6 million – falling short of the board's expectations can be identified as the declining sales in the IT Services segment and a number of sales opportunities which were expected in 2018 but failed to materialize.
Overall, the board of directors regards the 2018 financial year as very successful. Therefore, the medium-term forecast for the 2020 financial year, which was made in the 2017 full-year results, remains unchanged: the 2020 revenue should be one and a half times that of the 2017 revenue and the profit in the core segment should be approximately 15% (EBIT margin on operational performance). The GK/Retail turnover is likely to grow further in 2019. This year is a key step in the company's journey towards achieving its profitability target for the 2020 financial year, so the board expects the company to exceed the 2018 results.
The financial statement was published earlier today at https://investor.gk-software.com/de/veroeffentlichungen/financial-reports?task=download&cid=661.