Trading Update

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

K3 CAPITAL GROUP PLC

("K3", the "Company" and including its subsidiaries, the "Group")

Trading update

K3 Capital Group plc, a leading business and company sales specialist in the UK, provides the following update in light of current equity market conditions and the rapidly changing developments regarding COVID-19.

The Company is pleased to report a positive trading period to the end of March 2020 with revenues for 10 months expected to reach a minimum of £14.3m +29% (corresponding 10 month period FY19 £11.1m), giving rise to an adjusted EBITDA of £6.5m +59% (corresponding 10 month period FY19 £4.1m). This shows a significant improvement compared with the same period FY19 with all three brands showing positive trends in both revenue and EBITDA. This represents the lowest expected outturn for the Group's performance over this 10 month financial period, with further scope for improvement subject to the completion of certain pipeline transactions in March.

Clearly the impact of COVID-19 on the UK SME market, from which the Group derives its business through the sale of such businesses, is significant. As a result, the Board fully expects a slowdown in revenues across the Group in the coming months and is closely monitoring the wider impact on operational KPIs.

In light of these difficult trading conditions and the Directors' prudent approach to the management of its overheads, the Company has reviewed its operational cost base and taken material, short term measures to mitigate the impact of COVID-19 on financial performance. This includes salary sacrifices across the plc Board and senior management team, together with general overhead reductions and the 'furloughing' of a proportion of the workforce under the Government's recently announced 'Job Retention Scheme'. As a result of these initiatives, the Group's monthly overheads are expected to reduce by approximately 70 per cent. from April 2020 and the Board therefore expects that the Company will be EBITDA positive in the months of April and May. The Company will also have the ability to extend these overhead savings beyond that period as required, subject to continued Government and management support.

It is important to note that all Directors, managers and senior people together with some support staff will continue to work within the business and that each and every department will be fully functional across each of the three brands to help our clients preparation in achieving their ultimate objectives.

The Company has taken the view to support the workforce as much as possible during this turbulent period and through a range of measures will look to minimise the number of job losses which may take place.

As a result of the many unknowns relating to COVID-19 in terms of timeline and both macro and micro economic consequences, the Board is unable to quantify the impact on the Group's financial and trading performance beyond the end of the current financial year and has therefore decided to suspend financial guidance going forward in future trading periods until both the impact and duration of the pandemic becomes clearer.

John Rigby (CEO) is highly experienced. He previously managed the rationalisation of the business during the global recession of 2009 and was subsequently responsible for managing its recovery and ongoing growth over the last 10 years.

John Rigby, CEO of K3, commented:

"Unlike 2009, the Company is in a very strong financial position with over £7m in bank reserves and no debt or gearing. Many of our competitors are not in such an enviable position and we expect this to create opportunities moving forward. In addition, we have a strong and experienced senior team combined with an automated business model which uses the latest data and technology therefore making us much more robust and opportunist to take advantage when the market shows signs of recovery. We are mindful that no one knows the severity of the current crisis but when there is light at the end of the tunnel business owners will no doubt be highly incentivised to capitalise on their business value and at the same time we believe that both trade and investment buyers both within the UK and overseas will be looking for opportunities and routes to expand through acquisition".

-ENDS-

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About K3 Capital

K3 Capital Group plc is a leading business sales and brokerage firm headquartered in Bolton with operations throughout the UK. It acts for vendors of businesses from c. £50,000 to c. £200 million through its three trading subsidiaries Knightsbridge, KBS Corporate, and KBS Corporate Finance. K3, through its trading subsidiaries, has received a number of adviser awards, most recently achieving the number 1 position in the 2019 Refinitiv Mid-Market M&A Review.

K3 Capital operates a disruptive business model with a direct marketing approach to client acquisition, using incentivised and experienced salespeople rather than advisory teams, while its highly visible online presence and proprietary online business valuation portal generates further leads. This innovative model, combined with a continuing strategy towards targeting higher value clients, are key drivers for growth and profitability.

The Group also offers all clients fully contingent and inclusive legal fees through its partner relationships with local and national law firms.

K3 Capital Group trades on the London Stock Exchange (AIM: K3C.L), having listed on 11 April 2017. Please visit www.k3capitalgroupplc.com for more information.