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This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014 ("MAR")

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K3 CAPITAL GROUP PLC

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

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Final audited results for the year ending 31 May 2020

and Notice of AGM

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K3 Capital Group plc, a multi-disciplinary professional services firm providing advisory services to SMEs, today announces its final results for the year ended 31 May 2020.

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Financial overview

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* Revenue adjusted to reflect KBS Corporate Sales clients invoiced through KBS Corporate Finance following an enhanced service offering, as further detailed in the Annual Report.

** Dividend per share for 2020 comprises the interim dividend per share of 3.7p (calculated over 42m shares in issue) and the proposed final dividend per share of 3.8p (calculated over 68.5m shares in issue).

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Operational overview

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Current trading and outlook

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^�All figures relating to 9 months are unaudited

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Notice of Annual General Meeting

The annual report (including the notice), will be posted to shareholders and will be made available on our website today.

The Company's Annual General Meeting (AGM) will be held on Friday 16 October at 11.00am at the offices of TLT LLP, 3 Hardman Square, Spinningfields, Manchester, M3 3EB.

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Commenting on the results, Non-Executive Chairman of K3 Capital Group plc, Ian Mattioli said:

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"I am pleased to report a satisfactory year of trading at K3 Capital Group plc. The trading period has seen a 10% increase in revenue and a 36% increase in EBITDA, this has been delivered despite the economic challenges that the COVID-19 pandemic has presented to companies and economies across the Globe."

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"Post year-end, we were delighted to welcome randd UK and Quantuma to K3 Capital Group, diversifying our service offering into R&D tax credits, pension advisory, forensic accounting and investigations and restructuring and insolvency. These acquisitions were immediately earnings enhancing for the Group and will provide significant cross-selling opportunities."

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"The Board remains positive for the outlook in FY21 due to strong first quarter of trading and the encouraging performance of major KPIs across the Group"

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John Rigby, CEO of K3 Capital Group plc said:

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"I am delighted to report a positive trading performance for FY20 and I am proud of how we as a business have initially reacted and subsequently dealt with the unprecedented circumstances of Covid-19 and a national lockdown. I am also confident that the fundraise and subsequent acquisitions which we have concluded post year end will serve to provide the now enlarged Group with a stronger foundation and more diversified base from which to expand and grow in the years ahead."

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"I have certainly been very encouraged by the demand for our services and the first quarter of FY21 has seen significant increases across all key metrics. We have started the year with a positive approach to the 'post lockdown era' and a revised forecast in place which shows significant growth in both revenue and EBITDA across the wider Group. Early months' trading is very much in line with market expectations and we are excited by the potential to deliver our growth strategy across the new Group."-

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-ENDS-

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For further information please contact:

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Information on K3 Capital Group plc can be accessed via the Group's website at www.k3capitalgroupplc.com

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K3 Capital Group plc is a multi-disciplinary professional services firm providing advisory services to SMEs, with operations throughout the UK and overseas.

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Services provided by KBS Corporate, KBS Corporate Finance, Knightsbridge and KBS Capital Markets:

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The Group's medium-term strategy is to build a wider group of growing and complementary professional services businesses to provide SME's with high quality advice across specialist disciplines.

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Strategic Report

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Chairman's statement

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I am pleased to report a highly satisfactory year of trading at K3 Capital Group plc despite the economic challenges that the COVID-19 pandemic has presented to companies and economies across the Globe. FY20 has been a year which has shown promising evidence of continued growth throughout all brands within the Group, demonstrated by a 54% increase in the total value of Transaction Fees compared to FY19.

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The trading period has seen an increase in both the volume and value of high value transactions, supported by consistent numbers of completed deals within the low to mid value range. As expected, the status of several transactions has not been immune to the aforementioned economic conditions, and whilst this has had a direct effect on the number of completed transactions across the Group, we are hopeful that a number of these transactions will duly complete as planned within FY21.

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I can therefore report revenues of �15.0m (FY19: �13.6m) and EBITDA of �6.8m (FY19: �5.0m). I can also report a profit after tax of �5.2m (FY19: �4.0m).

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It is also pleasing to report that the amount of interest received from acquirers has remained resilient throughout the entire period, demonstrated through a 34% increase in the number of NDAs signed across the Group, and I remain confident that this will support future Transaction Fee income as the effects of the COVID-19 pandemic on the UK M&A market are fully understood.

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K3 continued to both refine its direct marketing approach and build on capacity within its sales departments throughout FY20. In the first nine months of the financial year^�, yielded an increase in Retainer Fee income to �6.0m (Jun - Feb FY19: �5.9m). Due to the national pandemic and lockdown, whilst the majority of operational employees were able to work from home and continue delivering a service to willing clients, the final months of the financial year saw a significant loss of appetite from existing clients to continue with the delivery of services in the short term, opting to wait until there was more certainty. As revenue is recognised in line with the delivery of service, the impact of the three month national lockdown has led to the deferral of services and therefore there was effectively a pausing of recognised Retainer Fee income for the final two months of FY20. We feel that this suspension was a prudent decision and appropriate under the circumstances. Since the national lockdown was lifted post year end, we have resumed services to clients and therefore reinstated the recognition of Retainer Fee income in line with prior years. Therefore total Retainer Fee income stood at �6.6m (FY19: �8.1m), however, throughout the first nine months of the period, appointment levels showed a 8% increase and total Retainer Fees showed a 3% increase compared with the same period in FY19.

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Our Group has once again found itself excelling in national league tables, with Refinitiv naming us as the most active dealmaker in the Small Cap Financial Advisory review for 2019, and the EMEA Mid-Market review for the first seven months of 2020. Such accolades are testament to the dedication of the Board and employees in having the drive and determination to improve performance across the Group.

��^�All figures relating to 9 months are unaudited

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Financials

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As reported, revenues for the year stood at �15.0m (FY19: �13.6m), which generated an EBITDA of �6.8m (FY19: �5.0m) and an Operating Profit of �6.5m (FY19: �4.9m).

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Net cash at the year end stood at �8.3m (FY19: �5.8m). It is pleasing to report that 'free cash' (as detailed in the CFO report) rose to �4.3m (FY19: �3.1m).

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Group net assets at FY20 were �9.2m (FY19: �7.2m) with current net assets standing at �5.0m (FY19: �3.1m).

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As a result, the Board is recommending a final dividend payment of 3.80p per share. This results in a total dividend of 7.47p (FY19: 7.60p).

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The Board remains committed to the dividend policy as detailed in the Chief Financial Officer's report, whilst maintaining an appropriate level of dividend cover. If approved, the final dividend will be paid on 27 October 2020 to shareholders on the register at the close of business on 08 October 2020.

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Summary

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Whilst the UK experiences continuing economic challenges brought about by the COVID-19 pandemic and ongoing Brexit negotiations the Board is satisfied and encouraged with the performance of the Group as a whole, especially throughout the first nine months of the financial year, which reported increases across the majority of key metrics before the impacts of COVID-19 took effect.

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The Board remains positive for the outlook in FY21 due to a strong first quarter of trading and the encouraging performance of major KPIs across the Group, as detailed in the CEO report.

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I would like to thank the Directors and senior management team for their swift, decisive action as events around COVID-19 unfolded in March, not least in respect of their personal sacrifices in salary and bonus to protect jobs and support the Group.

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Post year-end, we were delighted to welcome randd UK and Quantuma to K3 Capital Group, diversifying our service offering into R&D tax credits, pension advisory, forensic accounting and investigations and restructuring and insolvency. These acquisitions were immediately earnings enhancing for the Group and will provide significant cross-selling opportunities.

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Following a restructure to our Board, which sees Martin Robinson move into the role of Senior Independent Director and Stuart Lees assume the role of Non-Executive Director, I would also like to take this opportunity to welcome Carl Jackson of Quantuma to the Board, as well as Charlotte Stranner as Non-Executive Director.

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Ian Mattioli MBE

Chairman

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21 September 2020

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Chief Executive Officer's Report

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Introduction and highlights

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The financial year ending May 2020 has been, as I am sure it has been for many, a year which presented many obstacles and challenges, the likes of which we have never experienced before. Whilst I feel that much of the impact of the COVID-19 pandemic is yet to unwind; I am proud of how we as a business have initially reacted and subsequently dealt with these unprecedented circumstances. I am also confident that the fundraise and subsequent acquisitions which we have concluded post year end will serve to provide the now enlarged Group with a stronger foundation and more diversified base from which to expand and grow in the years ahead.

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Despite the very difficult final quarter which saw lockdown imposed across the UK with an obvious impact on trading activity, I am delighted to report that Group revenues increased by 10% to �15.0m during� the financial year ending 31st May 2020 (FY19: �13.6m), with EBITDA increasing by 36% to �6.8m (FY19: �5.0m). This was achieved despite the final months of the reporting period being set against a backdrop of significant economic uncertainty and unprecedented challenges which have been brought upon us by the pandemic, with the wider M&A market witnessing the effects of an economic contraction.

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Whilst unwelcome, these challenges have enabled K3 to demonstrate its resilient and robust business model. As previously reported, during the lockdown period the Directors were able to significantly reduce the operating costs of the Group and since the trading update on the 25 March, the Group has remained EBITDA positive during a most challenging time.� I am also pleased to report that within the period, the Group has experienced an increase across several key metrics, resulting in a 56% uplift in total Transaction Fee income (FY20: �8.4m, FY19: �5.4m).

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As an innovative and disruptive player within the fragmented business and company sales marketplace, K3 continued to outperform the general market, completing 22% more deals than any other advisor (Refinitiv Global Small Cap M&A Review 2019) to maintain its market leading position as the UK's most active deal maker. Amid the current economic uncertainty, I am also� proud to announce that we retained this status throughout the first seven months of 2020 in the Refinitiv EMEA Mid-Market Insight, completing 15% more deals than our next nearest competitor from January to July 2020.

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The introduction of UK-wide 'lockdown' measures in March in light of the COVID-19 pandemic meant that each department across all brands within the Group were required to quickly adjust to remote working, both for the wellbeing and safety of our employees and to adhere to government guidelines. In the weeks leading up to 'lockdown', each department piloted a work from home initiative in order to eliminate as many potential operational inefficiencies in preparation for what we envisioned would be an inevitable scenario. I am pleased to report that the Board considers this to have been a resounding success, with our ability to minimise disruption to our core operations seen as a pillar on which we have built a strong start to FY21.

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Throughout all the recent challenges we have endeavoured to continue 'business as usual' with the continuing implementation of our strategy, predicated on effective use of data and industry leading marketing strategies supported by our own proprietary technology and delivered through our team of highly motivated and incentivised staff. The Group's performance is continually monitored through key performance indicators, including the volume and average value of mandates, completed transactions and average Transaction Fees.

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The Group's technological initiatives remain a key part of our ongoing growth strategy to attract both more sellers and more buyers to the Group. Our rapid reaction to the changing conditions saw some adjustments to our teams and a focus on controlling costs whilst remaining well placed to leverage commercial advantage from our market leading position.

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We remain committed to our ongoing 'bigger and better' strategy, which has once more delivered an increase of 67% in average Transaction Fees across the Group.

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I would like to once again thank my fellow Directors and all the staff across the Group for their hard work and dedication over the last 12 months. In the face of adverse market conditions and uncertainty in the wider macro-economic environment, to have achieved growth across several areas of the Group is testimony to our increasingly robust business model.

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Marketing spend for the period saw a decrease of 18% to �0.9m (FY19: �1.1m) as a direct result of the COVID-19 pandemic and the need to pause several key marketing activities during the final quarter of FY20. Although a reduction on the previous period, I am pleased to report that marketing spend was in line with budgets throughout the first nine months of the financial year, and has driven new client wins across the Group, many of which we hope will convert into Transaction Fee income as we move into FY21.

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Knightsbridge Business Sales

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Sales / Retainer Fees

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With two brands now fully established within the 'retail' and 'commercial' arenas, the Knightsbridge sales department continued to deliver growth across all key metrics throughout the first nine months of FY20, delivering increases across several key performance indicators before the effects of COVID-19 hit.

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A prosperous start to the year resulted in the number of new client appointments increasing by 10% from June to February^� (overall FY decrease of 13%), the value of Retainer Fee quotes increasing by 9% (overall: -17%), and the number of new client mandates increasing by 6% (overall: -19%).

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^�All figures relating to 9 months are unaudited

Despite a downturn in overall performance throughout the final three months of the period, total Retainer Fee income increased by 8% in FY20 compared to FY19.

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The outlook for FY21 is cautiously optimistic; many key metrics are showing significant signs of recovery, with appointment numbers and instructions increasing by 57% and 53% respectively in Q1 FY21 compared with Q4 FY20.

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Operations / Transaction Fees

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As expected and outlined in the last annual report, the Knightsbridge Commercial team has started to see traction in FY20, recording an 8% increase in total Transaction Fee income compared with FY19.

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Despite the previously outlined downturn in Q4, three out of four of the main operational KPIs showed increases over the full financial period, including: monthly non-disclosure agreements increasing by 78%, monthly buyer meetings increasing by 3%, and total Transaction Fees increasing by 8%. The average number of monthly offers received saw a 13% decline over the 12 month period, however throughout the first nine months^�, this metric also showed an increase of 2%.

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The Commercial department, which embodies our 'bigger and better' mantra, as well as the above KPI improvements, has seen an 8% increase in total Transaction Fee income over the entire reporting period, despite the difficulties of the final quarter.

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KBS Corporate

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Sales / Retainer Fees

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The continued success of the Knightsbridge Commercial brand in handling smaller value mandates has allowed the KBS Corporate sales department to focus on its 'bigger and better' mantra of securing higher value mandates which have� and will continue to fuel the success of the transactional side of the business.

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This has allowed the corporate sales department to spend more time dealing with larger clients in order to better understand their objectives and exit strategy. This enables us to further tailor our service offering to the client's needs, and resulted in an increase of 6% in the number of monthly appointments throughout the first nine months of FY20^� (overall: -12%).

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The requirement to adopt a fully remote strategy for the sales departments across the Group was perhaps the most crucial and testing transition posed by the pandemic and subsequent lockdown. It was imperative that we seamlessly adapted to fulfilling virtual meetings with potential clients, both to honour the arrangements we had already made with them to explore a company sale, and to ensure that the sales department remains operational until which point physical meetings are safe to attend once more.

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I am pleased to report that this has been a resounding success, with encouraging levels of appointments maintained throughout the 'lockdown', and the first quarter of FY21 seeing notable increases across all key metrics within the KBS Corporate sales department when compared to Q4 FY20.

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Operations / Transaction Fees

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Our continued investment into data, technology and buyer targeting, has again delivered increases in the volume of interested parties through the completion of NDAs (up 13% in FY20) and the number of buyer meetings arranged between KBS Corporate's clients and potential acquirers (up 4%). The effects of COVID-19 resulted in a slight decline of 4% in the number of offers submitted per month, however it is worth noting that from Q1 FY20 through to Q3 FY20, the number of offers received showed an 18% increase on the same period of the prior year, a direct result of the aforementioned increase in NDAs secured. We hope to be able to continue to deliver this growth into FY21 and beyond, with early KPIs supporting a quicker 'return to form' than we predicted.

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Despite the challenges faced, Transaction Fee* income increased by 20% during the period to �4.8m in FY20 (FY19: �4.0m) which is a pleasing result given the circumstances. I am pleased that the growth in KPIs over previous periods has had a positive effect on Transaction Fee income.

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^�All figures relating to 9 months are unaudited

* Revenue adjusted to reflect KBS Corporate Sales clients invoiced through KBS Corporate Finance following an enhanced service offering, as further detailed in the Annual Report.

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KBS Corporate Finance

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Operations / Transaction Fees

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FY20 was a very positive year for KBS Corporate Finance, with a significant number of transactions closing as expected, a welcome result following a disappointing FY19.

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Total Transaction Fees* increased by significantly from �0.8m in FY19 to a much improved �2.9m in FY20, an increase of 263%.

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We have carried forward a strong book of clients into FY21 and whilst the wider M&A market faces some challenges, we continue to receive strong interest from many UK and overseas investors, private equity, and trade acquirers, supported by a 13% increase in monthly NDAs received throughout the entire reporting period.

We continue to receive interest from many UK and overseas investors, private equity, and trade acquirers, which, when coupled with our strong WIP (transactions in legal exclusivity), should underpin our forecasts into FY20 and beyond.

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Looking ahead

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It is without doubt a challenging time to predict the future however we have certainly been very encouraged by the demand for our services and buyer activity in the post lockdown period. The first quarter of FY21 has seen significant increases across all key metrics within the volume brands of the Group when compared with the final three months of FY20.

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The strategy of our M&A business for FY21 is in line with our previously stated strategy of continuing to drive the volume of transactions across the Knightsbridge and KBS Corporate brands, combined with the ongoing delivery of our 'bigger and better' mantra. Whilst the economic challenges which are faced by UK SMEs and the wider economy present challenges when completing M&A transactions, the resilient and nimble nature of our business, together with the strong pipeline of clients brought forward by all three brands gives us confidence in delivering on our forecasts for the year ahead. Early performance indicators from Q1 FY21 suggest all brands are well underway in rebuilding towards the levels of performance seen throughout the first three quarters of FY20.

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Whilst the Corporate Finance brand continues to present an exciting opportunity to deliver significant transactions and therefore incremental revenue and profits, as previously stated; it is the Board's intention to continue the transition towards a model where the happening of such fees represents upside opportunity rather than downside risk.

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To achieve this, we will continue to leverage our data, technology and people to find more sellers, more buyers and aim to complete more transactions than any other UK advisor, with the intention of maintaining our position as the UK's number one advisor in the small cap market.

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Acquisitions of randd and Quantuma

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During the period we continued to develop our strategic plan of diversifying revenue streams by acquiring complementary professional services businesses. A comprehensive 'market mapping' exercise was conducted within two target segments, those being specialist tax reclaim and business restructuring / insolvency. Following successful identification of two preferred targets, a thorough due diligence process was conducted over the summer together with a successful fundraise, whereby �30.5 million was raised by way of the issue of new ordinary shares to support our strategy.

I am therefore delighted to report that during the first quarter of FY21, K3 Capital Group plc completed the acquisitions of both randd UK Limited, a research and development tax reclaim specialist, and Quantuma Advisory Limited, a business advisory firm specialising in corporate finance, financial advisory, pension advisory, forensic accounting and investigations, and restructuring and insolvency.

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Following these acquisitions, K3 Capital Group plc has become a broader professional services Group which incorporates the UK market leader in company sales, one of the longest established R&D tax reclaim businesses in the UK and one of the UK's fastest growing restructuring, insolvency and advisory firms, creating a Group with diversified income streams, recurring revenues, multiple and complementary channels to market and significant cross selling opportunities.

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* Revenue adjusted to reflect KBS Corporate Sales clients invoiced through KBS Corporate Finance following an enhanced service offering, as further detailed in the Annual Report.

The acquisitions were immediately earnings enhancing and give the Group a more diverse revenue and profit profile, bringing significant growth potential and providing a greater degree of visibility and predictability in the 'post covid' world.

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Directors and senior management across the Group are working through a 100 day plan to ensure smooth integration of the acquisitions. In addition, we aim to streamline and consolidate certain Group functions such as finance, human resources and marketing to create some cost synergies.

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Following the acquisitions, we were pleased to welcome Carl Jackson, the Chief Executive Officer of Quantuma, to the plc Board and we also further strengthened and balanced the Non-Executive function of our Board through the appointment of Charlotte Stranner, Stuart Lees' change to Non-Executive Director and the appointment of Martin Robinson as Senior Independent Director. I believe this provides the Group with a well-balanced Board of four Executive Directors, and four Non-Executive Directors.

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The Board is considering changing the name of the Group to reflect the Group's wider service offering following the recent acquisitions and� with the changing nature of the Group's revenue and profits, the Board will also be considering how it reports on performance and will develop an appropriate suite of KPIs in order to communicate its future results. Further information regarding a possible name change and results reporting will be communicated in due course.

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We are working on a number of new initiatives to take advantage of the complementary nature of all businesses within the Group and we plan to launch several direct marketing strategies for Quantuma and randd in FY21, in addition to expanding and leveraging the Group's existing accountancy and professional services referral networks. We remain committed to our medium-term strategy to build a wider group of growing and complementary professional services businesses to provide SMEs with high quality advice across specialist disciplines, and continually evaluate organic and acquisitive opportunities.

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A positive start

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We have started the year with a positive approach to the 'post lockdown era' and a revised forecast in place which shows significant growth in both revenue and EBITDA across the wider Group. Early months' trading is very much in line with market expectations and we are excited by the potential to deliver our growth strategy across the new Group.

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The first quarter has already seen encouraging signs within our M&A businesses, with significant improvement across all major KPIs in comparison to Q4 FY20, which was heavily impacted by lockdown. We are encouraged by the demand for our M&A services from both sellers and buyers, and whilst the full effects of the pandemic are yet to unfold, we are delighted with the level of new client wins and completed transactions which gives us confidence in the year ahead.�

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The randd team have also started the year positively with strong performance over the first quarter as part of the wider Group, supported by a number of cross referrals from the existing KBS and Quantuma client base.

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With the additional contribution of Quantuma trading for the final month, the first quarter of FY21 has resulted in turnover (unaudited) of �5.6m, delivering EBITDA (excluding exceptional transactional costs, unaudited) of �2.3m. We remain confident in delivering performance in line with market expectations.�

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John Rigby

Chief Executive Officer

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21 September 2020

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*Transaction fee income and Transaction volumes are adjusted to reflect KBS Corporate Sales clients invoiced through KBS Corporate Finance following an enhanced service offering, as further detailed in the CFO report.

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Chief Financial Officer's Report

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Income Statement

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I am delighted to report a welcome 10% increase in Group turnover for the year with a result of �15.0m (FY19: �13.6m). The financial year saw a significant increase in operational activity and transactional income, largely due to prior year investments in technology and people, which helped drive significant growth through the period despite an uncertain final quarter.

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The year saw continued investment into our industry leading client service levels, and average headcount growing to 166 during FY20 (FY19: 153), with additional resource being given to all departments in order to further the high levels of customer service we expect to deliver to our clients, both new and existing.

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There was clear disruption to the end of FY20 due to the effects of COVID-19 which is detailed in the CEO report. Despite this, when reviewing the first 9 months^� of FY20 compared to the same period in FY19, the Group has seen significant uplift in Key Performance Indicators, with 8% more client meetings delivering a 3% increase in Retainer Fee income from the sales function, with a 51% increase in buyer registrations, leading to a 32% increase in buyer meetings, delivering a substantial 74% increase in Transaction Fee income from the operational function.

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Due to the COVID-19 pandemic and the Government decision to impose a national lockdown in March 20, the final quarter of FY20 was an uncertain time for all in the Group. The Board welcomed the Government's Coronavirus Job Retention Scheme (CJRS) as this allowed the Board time to better understand the impact of the pandemic and make informed decisions - which ultimately has led to minimal staff loss over the period and the retention of a significant number of jobs as the scheme intended.

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The Group achieved EBITDA of �6.8m, an uplift of 36% on the prior year (FY19: �5.0m) despite the challenges faced in Q4.

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Group Retainer fee Income

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Recognised Retainer Fee income (see note 3) for the first 9 months^� of the financial year showed a 3% increase compared with the same period of FY19.

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However due to lockdown restrictions imposed throughout the final quarter, recognised Retainer Fee income (see note 5) declined in the period by 18% to �6.6m (FY19: �8.1m). In line with IFRS15 the Retainer Fee income is recognised over a period of time linked to the delivery of service on client contract. Due to the national pandemic and lockdown, whilst the majority of operational employees were able to work from home and continue delivering a service to willing clients, the final months of the financial year saw a significant loss of appetite from existing clients to continue with the delivery of services in the short term, opting to wait until there was more certainty. As revenue is recognised in line with the delivery of service, the impact of the three month national lockdown has led to the deferral of services and therefore there was effectively a pausing of recognised Retainer Fee income for the final two months of FY20. We feel that this suspension was a prudent decision and appropriate under the circumstances. Since the national lockdown was lifted post year end, we have resumed services to clients and therefore reinstated the recognition of Retainer Fee income in line with prior years.

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Transaction fee income

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The continued growth of the volume brands and improved performance of the Corporate Finance ("CF") team saw a significant increase in Group Transaction Fee income (see note 5) for FY20, delivering �8.4m, representing a 56% increase on prior year (FY19: �5.4m). The headline movement has come from the KBS Corporate Finance department. Following the frustrations of FY19 delivering �0.8m* with the slowing of larger transactions, this year has seen an improvement in the quality of client mandates leading to a number of transactions completing to deliver �2.9m* of Transaction Fee income in FY20.

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In FY19 the Group reported the pleasing growth of the 'CF Lite' team, which, from a standing start delivered �2.6m of income in the period. I am pleased to report that this department continues to deliver growth with FY20 delivering �3.3m of income, a 33% increase from the prior year, further demonstrating the 'bigger and better' mantra that has been the Group objective for many years.

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* Revenue adjusted to reflect KBS Corporate Sales clients invoiced through KBS Corporate Finance following an enhanced service offering, as further detailed in the Annual Report.

^�All figures relating to 9 months are unaudited

Whilst COVID-19 has undoubtedly resulted in a slowing of transactions since March, the Group has continued to complete a number of transactions pre and post the lockdown period. Since year end we have seen a significant improvement in buyer activity displaying encouraging signs for FY21. Although the timing and certainty of transactions can never be guaranteed, the Directors are confident the Group is well positioned to utilise its data, marketing and proactive approach in order to keep ahead of its peers in attracting buyers for our clients' businesses.

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Marketing costs

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Group marketing spend has declined by 18% in FY20 to �0.9m (FY19 �1.1m). As a direct result of the COVID-19 lockdown, the Board took the decision to curb all unnecessary expenditure across the Group in order to protect the business and mitigate potential redundancies. The final two months of FY20 saw a significant reduction in the average monthly marketing spend (down 88%), demonstrating the agile nature of expenditure control.

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Overhead costs

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Overheads for FY20 reduced slightly to �7.3m (FY19: �7.5m). This can be broken down into two separate cost areas - being payroll costs and general overheads. In March, following the 'grounding' of sales staff in line with lockdown, as with marketing expenditure all non essential spend was cancelled or postponed. As such, general overheads were reduced to �1.3m (FY19: �1.5m) - with the final two months of FY20 averaging �75k down from �113k over the rest of the financial year.

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As detailed in Note 3, IFRS16 was implemented in FY20, which resulted in lease costs falling below the EBITDA line. A full assessment has been carried out in respect of this and, there has been no material change to the PBT of the Group.

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In respect of Group wages, staff numbers continued to grow during the period, and the uplift in turnover on prior year also resulted in an increase in bonus payments to staff. However, in the final two months of the year a portion of the workforce was placed on CJRS, in addition to all Directors taking significant pay reductions to mitigate potential job losses due to COVID-19. These significant measures taken by the Board resulted in a drop in average payroll costs from �570k a month down to �142k a month for April and May, as a result the FY20 payroll cost equated to �6.0m which was flat on FY19 (�6.0m).

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EBITDA

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It is pleasing to see EBITDA for the period growing to �6.8m (FY19: �5.0m), with an improved EBITDA margin of 45% (FY19: 37%). This movement in EBITDA margin is predominantly caused by the increase in value of transactions in the period alongside cost reduction measures taken in the final quarter.

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Profit before taxation

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The period has seen profit before tax of �6.4m delivered (FY19: �4.9m)

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Taxation

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The effective tax rate is 18.9% which is marginally higher than the prior year (FY19: 18.5%).

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Earnings per share

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Based on the closing 42.2m shares in issue, the basic earnings per share (see note 13) was 12.37p for the year (FY19: 9.43p).

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Statement of financial position

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Cash

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The Group cash balances have significantly improved during the period due to the uplift in performance in FY20. The year ended with �8.3m of cash (FY19: �5.8m).

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As always, the Group business model continues to be highly cash generative with Retainer Fee income typically being paid in advance of services. Due to the month end processing of wages, and bonus payments being made after receipt of income, this leaves minimal requirement for working capital in the business.

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There have been no exceptional cash items in the period.

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The Directors regularly review Group cash balances to ensure appropriate application of funds. As noted in previous reports, whilst a �8.3m cash balance appears high for a Group with minimal working capital requirement, once a provision for corporation tax, VAT and PAYE (�1.4m), and a provision for a final dividend (�2.6m) are taken into account, this leaves a free balance of �4.3m (FY19: �3.1m), which, despite increasing uncertainty across the globe, the Directors feel is sufficient liquidity for the Group.

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By exception, other points of note with regard to the statement of financial position are:

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Covid-19 mitigation measures

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As detailed above, the Group took part in the Coronavirus Job Retention Scheme (CJRS) under which it received �344k of government support. At the same time, management sacrificed salary and bonus payments amounting to �611k, representing 177% of the funds received through the CJRS. The commitment and understanding of the management team, complemented by the assistance offered by the CJRS, drastically mitigated the potential number of redundancies.

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A significant majority (69%) of the CJRS grant was within our sales and marketing functions; the government lockdown which commenced in March 2020 meant that no face to face meetings were possible, and consequently many client appointments were cancelled. A small number of the team continued working throughout the period, and introduced new ways of undertaking client appointments remotely to ensure some continuity of services.

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Throughout the lockdown period, other staff within the company were able to remain active in order to manage relationships with existing clients. This meant that in the departments where staff were required, much less government support was needed.

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The CJRS, along with the personal sacrifices of both the Board and senior management (by way of salary sacrifice and bonus reduction) provided the Board with time to further understand the impact of Covid upon the business and thereby avoid making hasty decisions with respect to redundancies.

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As a direct result of these combined measures, we have undoubtedly seen a significant reduction in the potential number of job losses across the Group. As demand for our services gained momentum in the first quarter of FY21, staff were brought back to work into positions retained thanks to the CJRS and the personal sacrifices made by the Board and senior management. We estimate that in excess of 80% of potential redundancies have been avoided, and as at the date of this report, no employees remain on furlough.

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Shareholders' dividend

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The Board is recommending a final dividend of 3.80 pence per ordinary share, based on 68,549,055 shares in circulation at the date of this report (FY19: 42,210,526) payable to shareholders on the register on 9 October 2020 (with an associated ex dividend date of 8 October 2020), subject to shareholder approval at the Group's Annual General Meeting on Friday 16 October 2020.

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The final dividend, together with the January interim dividend of 3.67p (based on 42,210,526 in circulation at the date of the dividend), gives an indicative total dividend of 7.47 pence per share for the year (FY19: 7.60 pence, 42,210,526 shares).

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On admission of the Group's ordinary shares to trading on AIM in April 2017, the Board outlined an intention to pay approximately 80% of the Group's adjusted post tax profits for the year weighted 1/3 on interim results and 2/3 on final results. This final dividend of c�2.6m in addition to the interim dividend of c�1.6m represents approximately 80% of the Group's post tax profits for the year.

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The Board assessed the payment of a final dividend in context of having received funds under the Government's CJRS. As noted earlier in this report, the Board and senior management's personal contribution with salary and bonus sacrifice was far greater than the government support received, and the combined measures mitigated a significant number of job losses, The decision to pay a final dividend has been taken in the context of the above, together with the post year end acquisitions of Quantuma and randd UK, which have significantly enhanced the Group's future prospects due to the counter cyclical nature of the Quantuma model and the contracted and recurring nature of the randd revenues.

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Change in dividend policy

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As discussed with shareholders during the recent fundraise, and as outlined by the Board in recent announcements following the acquisitions of randd UK and Quantuma, K3 is committed to maintaining an attractive dividend policy, now expected to be in the region of 75% of adjusted post tax profits.

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This is to remain broadly consistent with the intentions established on AIM listing whilst taking into consideration future commitments linked to earn outs and working capital requirements of the Group.

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Share price

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The K3 Capital Group plc share price closed the financial year at 175.5 pence (31 May 19: 135.5 pence).

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Going concern

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The Directors confirm they have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of signing these financial statements. As at the end of FY20, the K3 balance sheet contained �8.3m of cash reserves and has remained profitable for the period since. The acquisitions post balance sheet were funded through shareholder investment with new share issues, to cover both the purchase prices and all related costs of acquisition to conserve the cash reserves.

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This confirmation is made after having reviewed assumptions about future trading performance, valuation projections, capital expenditure, asset sales and debt requirements contained within the Group's current five-year plan. In addition to this, the Board has prepared detailed cash flow forecasts for the period to 31 May 2022 for the wider Group. Under these worst case scenarios, the Group is still expected to remain cash positive at least the next 12 months. The Directors also considered potential risks and uncertainties in the business, such as credit, market and liquidity risks, including the availability of bank facilities. Further stress testing has been carried out to ensure the Group has sufficient cash resources to continue in operation for at least the next 12 months following the short term performance issues relating to COVID-19.

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This stress testing included extreme downside scenarios with materially reduced levels of cash receipts over this period. These downside scenarios excluded any mitigating actions that the Board would be able to take to reduce costs - as the Board have demonstrated in the final months of FY20, the business has a low fixed cost base with the ability to significantly reduce marketing spend, general overheads, and even payroll costs with senior management sacrifice in times of need. Under these scenarios, the Group would still expect to remain cash positive for at least the next 12 months from the date of this report.� The Directors have not identified any material uncertainties that may cast significant doubt about the Group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

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Based on the above, together with available market information and the Directors' knowledge and experience of the Group's client portfolio and markets, the Directors continue to adopt the going concern basis in preparing the accounts for the year ended 31 May 2020.

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Andrew Melbourne

Chief Financial Officer

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21 September 2020

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All the activities of the Group are from continuing operations.

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1. Basis of preparation

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The preliminary financial information does not constitute statutory accounts for the financial years ended 31 May 2020 and 31 May 2019, but has been derived from those accounts. The accounting policies used in preparation of this preliminary announcement are in line with the 2020 annual report, with the principal accounting policies disclosed below. Statutory financial statements for the year ended 31 May 2020 will be delivered to the Registrar of Companies following the Company's annual general meeting. The auditors have reported on those accounts and their reports were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006

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Basis of Consolidation

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The Group financial statements consolidate the results of the company, K3 Capital Group PLC, and its subsidiaries (together referred to as the "Group").

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Subsidiary undertakings acquired are included using the acquisition method of accounting. Under this method the consolidated statement of comprehensive income, consolidated statement of financial position and consolidated statement of cash flows included the results and cash flows of subsidiaries from the date of acquisition and to the date of sale outside the Group in the case of disposals of subsidiaries.

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Where the company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.���������

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New standards, amendments to and interpretations to published standard

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Impact of initial application of IFRS 16 Leases

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In the current year, the Group has applied IFRS 16 Leases (as issued by the IASB in January 2016) that is effective for annual periods that begin on or after 1 January 2019.

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IFRS 16 introduces new or amended requirements with respect to lease accounting. It introduces significant changes to lessee accounting by removing the distinction between operating and finance lease and requiring the recognition of a right-of-use asset and a lease liability at commencement for all leases, except for short-term leases and leases of low value assets when such recognition exemptions are adopted. In contrast to lessee accounting, the requirements for lessor accounting have remained largely unchanged.

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The impact of the adoption of IFRS 16 on the Group's consolidated financial statements is described below.

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The date of initial application of IFRS 16 for the Group is 1 June 2019.

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The Group has applied IFRS 16 using the modified retrospective approach which:

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The right of use asset is equal to the lease liability, adjusted for prepaid or accrued lease payments

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Impact of the new definition of a lease

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The Group has made use of the practical expedient available on transition to IFRS 16 not to reassess whether a contract is or contains a lease. Accordingly, the definition of a lease in accordance with IAS 17 and IFRIC 4 will continue to be applied to those leases entered or changed before 1 June 2019.

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The change in definition of a lease mainly relates to the concept of control. IFRS 16 determines whether a contract contains a lease on the basis of whether the customer has the right to control the use of an identified asset for a period of time in exchange for consideration. This is in contrast to the focus on 'risks and rewards' in IAS 17 and IFRIC 4.

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The Group applies the definition of a lease and related guidance set out in IFRS 16 to all lease contracts entered into or changed on or after 1 June 2019. In preparation for the first-time application of IFRS 16, the Group has carried out an implementation project. The project has shown that the new definition in IFRS 16 will not significantly change the scope of contracts that meet the definition of a lease for the Group.

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Impact on Lessee Accounting

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IFRS 16 changes how the Group accounts for leases previously classified as operating leases under IAS 17, which were off balance sheet.

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Applying IFRS 16, for all leases, the Group:

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a ) Recognises right-of-use assets and lease liabilities in the consolidated statement of financial position, initially measured at the present value of the future lease payments;

b) Recognises depreciation of right-of-use assets and interest on lease liabilities in the consolidated statement of profit or loss;

c) Separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within financing activities) in the consolidated statement of cash flows.

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Lease incentives (e.g. rent free period) are recognised as part of the measurement of the right-of-use assets and lease liabilities whereas under IAS 17 they resulted in the recognition of a lease incentive, amortised as a reduction of rental expenses on a straight line basis.

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Under IFRS 16, right-of-use assets are tested for impairment in accordance with IAS 36.

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The Group has used the following practical expedients when applying the modified retrospective approach to leases previously classified as operating leases applying IAS 17.

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Financial impact of initial application of IFRS 16

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The weighted average lessee's incremental borrowing rate applied to lease liabilities recognised in the statement of financial position on 1 June 2019 is 3%.

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The following table shows the operating lease commitments disclosed applying IAS 17 at 31 May 2019, discounted using the incremental borrowing rate at the date of initial application and the lease liabilities recognised in the statement of financial position at the date of initial application.

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The Group has recognised �1,064,000 of right-of-use assets and �1,064,000 of lease liabilities upon transition to IFRS 16.

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IFRIC 23 Uncertainty over Income Tax Treatments

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The Group has adopted IFRIC 23 for the first time in the current year. IFRIC 23 sets out how to determine the accounting tax position when there is uncertainty over income tax treatments. The Interpretation requires the Group to:

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In the current year, the Group has applied a number of amendments to IFRS Standards and Interpretations issued by the IASB that are effective for an annual period that begins on or after 1 June 2019. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

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New standards, amendments to and interpretations to published standards not yet effective

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There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.

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IFRS 17���������������������������������������������� -�������������� Insurance Contracts�������������������������������������������

IFRS 10 and IAS 28 (amendments)� ��-� � � � � � � Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Amendments to IFRS 3� � � � � � � � � � � �-�������������� Definition of a business

Amendments to IAS 1 and IAS 8� � � � �-�������������� Definition of material

Conceptual Framework� � � � � � � � � � � ��-�������������� Amendments to References to the Conceptual Framework in IFRS Standards

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The Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods

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Going Concern

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��������������� The financial statements have been prepared on the basis that the Group will continue as a going concern.

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Based on financial performance to date and forecasts along with significant cash reserves coupled with no debt in the Group, there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis of accounting in preparing the annual financial statements. The Board has prepared cash flow forecasts for the period to 31 May 2022. Under this base case scenario, the Group is expected to continue to have significant headroom relative to the cash reserves available. The Board has also considered various other severe downside scenarios, including the possibility of a second lockdown as a result of a second wave of Covid-19. These downside scenarios included significant reductions in expected turnover levels in all trading subsidiaries of the Group, and excluded any mitigating actions that the Board would be able to take to reduce costs. Under these scenarios, the Group would still expect to have sufficient cash reserves to operate. The Group therefore continues to adopt the going concern basis of accounting in preparing the annual financial statements

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Revenue Recognition

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Revenue comprises revenue recognised by the Group in respect of services supplied during the year, exclusive of Value Added Tax.

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The Group recognises revenue from the following major sources:

��������������� Retainer Fees arising from customers for professional advice

��������������� Transaction Fees arising from business sales arranged by the Group companies

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Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.

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There is one performance obligation associated with Retainer Fee income. Although there are different services provided, none of these are individually distinct. These services include the drafting of an information memorandum, as well as performing research to obtain a buyer for the client. Revenue is recognised over time because the work performed does not create an asset of which has an alternate use, and the K3 Capital Group has an enforceable right to payment for the work of which has been performed. There is no variable consideration.

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Due to revenue being recognised over time, and agreements overlapping the period end, contract liabilities are recognised when invoiced revenue is recognised in advance of delivery of the remaining service of the retainer. As these contracts are similar in nature, the review of milestone completion and calculation of contract liabilities is done on a portfolio basis.

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As detailed within the CFO report, due to the impact of lockdown and the fact that the Company utilised the CJRS, the decision was taken to review the estimates applied to revenue recognition following the national lockdown and impact on the delivery of services, as a result there was a deferral of 2 months retainer fee income at the end of FY20.

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The transaction price is determined at inception of the contract. The transaction price is allocated to the performance obligation in line with the stage of completion of the retainer.

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There is one performance obligation within Transaction Fee income. This obligation is the completion of a Transaction as defined in K3's terms of business, being the transfer of shares or assets from a client to a third party, with fees settled from the sale proceeds. No contract liabilities arise with Transaction Fee income, and there is no variable consideration. Further detail on revenue recognition policies is provided in the critical accounting estimates section in the Annual Report.

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Employee benefits

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i���������� Short-term benefits

������������������������������� Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group.

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ii�������� Defined Contribution plans

The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the Group. The annual contributions are charged to the Statement of Comprehensive Income. The Group also contributes to the personal pension plans of the Directors at the Group's discretion.

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��������������� Operating Profit

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Operating profit is stated after all expenses, including those considered to be exceptional, but before finance income or expenses. Distribution costs relate to marketing expenses. All other operational costs are classified as administrative expenses.

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��������������� EBITDA

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Operating profit is stated after all expenses, including those considered to be exceptional, but before finance income or expenses. Distribution costs relate to marketing expenses. All other operational costs are classified as administrative expenses.

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2. Revenue

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The Group's revenue arises from the provision of services in fulfilling the principal activities. An analysis of revenue by subsidiary company is shown below:

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A further breakdown of revenue by type is shown below:

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3. Operating Profit

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Operating profit or loss is stated after charging:

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4. Employee Benefit Expense

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The average number of persons employed by the Group during the year, including the directors, amounted to:

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The aggregate payroll costs incurred during the year by the Group, relating to the above, were:

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5. Earnings per share

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Basic earnings per share amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the period.

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Diluted earnings per share are calculated by dividing the profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would have been issued on the conversion of all dilutive potential ordinary shares into ordinary shares at the start of the year, or, if later, the date of issue.

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The following reflects the income and share data used in the basic and diluted earnings per share computations:

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The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the weighted average number of shares used in the calculation of basic earnings per share as follows:-

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6. Contract liabilities

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The contract liabilities arise from the non-contingent contracts provided to certain customers in respect of providing business marketing and research to these clients. Revenue is recognised and deferred in accordance with services provided within contract terms.

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Annual Report

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The annual report will be mailed to shareholders and made available on our website on or around 21 September 2020. Copies will be made available after that date from: The Secretary, KBS House, 5 Springfield Court, Summerfield Road, Bolton, BL3 2NT.

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Annual General Meeting

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The Company's Annual General Meeting (AGM) will be held on Friday 16 October at 11.00am at the offices of TLT LLP, 3 Hardman Square, Spinningfields, Manchester, M3 3EB.

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Copies of the announcement can be found on the Investor Relations section of the Company's website: www.k3capitalgroupplc.com

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