(Alliance News) - K3 Capital Group PLC said Wednesday its trading in the 10-months to the end of March was "positive".
K3 expects revenue in the period to total GBP14.3 million, which would represent a 29% increase year on year. Adjusted earnings before interest, tax, depreciation and amortisation is expected to grow 59% to GBP6.5 million.
"This shows a significant improvement compared with the same period in financial 2019 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," K3 said.
K3 noted the Covid-19 outbreak will "clearly" have an effect on its business, expecting a slowdown in revenue in the coming months.
As a result, the company said it taken material, short term measures to mitigate the impact of the virus.
This includes salary sacrifices across the 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 about 70% 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," K3 added.
Due to the ongoing uncertainty, K3 said it 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.
Chief Executive John Rigby said: "Unlike 2009, the company is in a very strong financial position with over GBP7 million 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.
"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".
Shares in K3 Capital closed 6.6% higher in London on Wednesday at 145.44 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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