Acquisition

3 December 2018

AFH FINANCIAL GROUP PLC

("AFH" or the "Company")

ACQUISITION OF CTL THREE LIMITED TOGETHER WITH ITS SUBSIDIARY COMPANIES

The Board of AFH, a leading financial planning led wealth management firm, is pleased to announce the completion of the acquisition of CTL Three Limited, together with its subsidiaries; The Insurance Partnership Financial Services Limited; PCWM Limited; IFA Professional Planning Limited; Private Client Wealth Management (Yorkshire) Limited and Kirk Ella Investments Ltd, (together "CTL"). As a result of the transaction Paul Hodgson, Paul Newman, Shane Beardsley and Victoria Hicks, together with 22 advisers and their support staff, will join AFH bringing over £530m of FUM. The acquisition significantly expands the AFH presence in the North East.

Under the terms of the acquisition, the maximum purchase price is £10m dependent upon performance criteria of the business acquired. The initial consideration for the acquisition will be satisfied by a cash payment of £4.2m, funded from the Company's existing cash resources, and the issue of 26,178 ordinary shares of 10 pence each in the Company ("the Consideration Shares") to Paul Hodgson at 382p, being the average mid-market price of the three days prior to completion. Further deferred consideration will be payable in cash over the next 26 months, subject to enhanced performance criteria of the business being achieved. For the twelve month period ended 30 June 2018, CTL achieved revenues of £4.7m and profit before tax of £1.1m. On a post-acquisition pro-forma basis, the business would have generated an estimated profit before tax in excess of £1.4m during the period.

Application has been made for the admission of the Consideration Shares to trading on AIM. The Consideration Shares will rank pari passu in all respects with the existing ordinary shares of the Company. The Consideration Shares are expected to be admitted to trading on AIM on 6 December 2018.

Following the issue of the Consideration Shares, the issued share capital of the Company will comprise of 42,051,498 ordinary shares of 10 pence, each with one voting right. The above figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or change to their interest in, the share capital of the Company.

Commenting, Alan Hudson, Chief Executive of AFH, said:

"The acquisition of CTL is our third transaction of the year and significantly expands AFH's national footprint with over 240 advisers working across the UK and over £5bn of FUM. At the start of the 2017 financial year, the Board set itself three medium term financial aspirations: FUM of greater than £5bn, revenues of £75m per annum and underlying EBITDA margin of 20% on revenue. The acquisition of CTL takes our FUM to above £5bn and we remain confident of achieving the remaining targets.

This is our third acquisition in the North East since June 2018 and as a result AFH now have over 50 advisers located in the region. Under Paul and his management team's leadership CTL has built a strong presence in the North East and I am pleased to welcome Paul and his team to the AFH community. I look forward to working with them to further the development of the AFH brand and continue our growth for the benefit of our new clients and to increase shareholder value."

Enquiries:

AFH Financial Group PLC 01527 577 775

Alan Hudson, Chief Executive Officer

Paul Wright, Chief Financial Officer

www.afhfinancialgroup.com

Liberum (Nominated Adviser and Broker) 020 3100 2000

John Fishley/Richard Bootle /Euan Brown

This announcement is released by AFH Financial Group plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Paul Wright, Chief Financial Officer.