Pre-Close Trading Update

K3 CAPITAL GROUP PLC

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

Pre-Close Trading Update

Revenue and EBITDA expected to be comfortably ahead of market expectations

K3 (AIM: K3C), a multi-disciplinary and complementary group providing specialist advisory services to SMEs, incorporating Business and Company Sales, Restructuring and Insolvency and Tax Advisory services, announces an update on trading for its financial year ended 31st May 2022.

Highlights:

· Full year results expected to be comfortably ahead of market expectations and significantly ahead of prior year*:

o  Revenue expected to increase by c.43% (c.18% organic**) to c.£67.5m (FY21: £47.2m)

o  Adjusted EBITDA expected to increase by c.24% to c.£19.5m (FY21: £15.7m)

· All three business divisions expected to report very strong performances:

o  Business Sales: Revenue +c.34% (c.24% organic**) to c.£21.5m (FY21: £16.0m)

o  Restructuring: Revenue +c.33% (c.11% organic**) to c.£34.5m (FY21: £25.9m)

o  Tax: Revenue +c.120% (c.34% organic**) to c.£11.5m (FY21: £5.2m)

· Robust balance sheet, with c.£12.0m net cash as at 31 May 2022 (FY21: £14.3m), providing significant headroom to fund organic investment and acquisition opportunities***

· Senior leadership team strengthened further in line with the scale and ambitions of the Group

The Group delivered an exceptional performance over the period, driven by the continued execution of the Group's strategy. Notable highlights over the period include strong organic revenue growth, the successful integration and growth acceleration of complementary acquisitions and new service line launches providing further cross selling opportunities within the Group's SME client base.

The Group saw a strong performance across all three business units, which are experiencing a growing share of work as the Group's data-driven marketing platform and cross-referral network are leveraged across divisions. The Business Sales Division had a record year driven by continued organic growth momentum enabled by the Group's data driven marketing technology platform. The Restructuring Division has grown well, whilst at the same time investing in both its UK business and its overseas office footprint, and is seeing increasing demand for its services. The Tax Division has seen both organic and inorganic growth, to deliver over 120% increase in revenues of which a high proportion are recurring in nature.

John Rigby, Group CEO, commented:

"This financial year has seen the Group further deliver on its strategy to grow both organically, through selective complementary acquisitions and also through launching new service lines that can be leveraged across our SME client base.

"We have seen strong growth across all of our business divisions underpinned by the Group's proprietary data-driven marketing platform and cross-referral network, which continues to drive competitive differentiation and deliver a strong pipeline of opportunities across the Group.

"We are continuing to demonstrate over-delivery against market expectations, highlighting the resilience of our diverse business model. Against a backdrop of wider macro-economic challenges, our growing base of SMEs turn to us for essential services throughout their business journeys. Whilst we are seeing a growing demand for Restructuring services as SMEs navigate economic headwinds and unwinding of covid Government support, the opportunity across Business Sales and Tax is buoyant as we grow our footprint and apply our specialist skills. My thanks must go to all our employees for their dedication and hard work in delivering these results.

"We anticipate another year of growth across all divisions, supplemented with an attractive pipeline of M&A opportunities." 

*Market expectation based upon Numis research note of May 22 (£63.5m revenue and £18.2m EBITDA)

**Adjusted to annualise for acquisitions

***Net cash quoted after payment of c.£7.4m of dividends and c.£14.5m of acquisition consideration and earn outs, note c.£10.0m funded through July 2021 placing

-Ends-

For further information, please contact:

About K3 

K3 Capital Group plc (AIM:K3C) is a multi-disciplinary and complementary group providing specialist advisory services to SMEs, incorporating Business and Company Sales, Restructuring and Insolvency and Tax Advisory services. The Group floated on the London Stock Exchange's Alternative Investment Market (AIM) in April 2017.

Services provided by the Group fall into three key operating divisions:

Business Sales Division:

· Company sales and business brokerage

· Corporate finance services

· Transaction services

· Debt advisory 

Tax Division:

· Research and development tax credit advisory

· Tax investigations

· Tax planning

· Tax advisory 

Restructuring Division:

· Restructuring advisory

· Financial advisory

· Creditor services

· Forensic accounting and expert witness

· Pensions advisory

· Accelerated M&A