Business sales specialist cuts costs by 70 per cent in bid to weather financial storm
Business and company sales specialist K3 Capital says it is in a strong position to weather the current economic storm.
The Manchester company issued a trading statement this morning as a result of the current equity market conditions and the rapidly changing situation regarding COVID-19.
The firm said revenues for the last 10 months are expected to reach a minimum of £14.3m an increase of 29 per cent.
The increase is a significant improvement compared with the same period FY19 with all three brands showing positive trends in both revenue and EBITDA.
The company said 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.
The board expects a slowdown in revenues across the group in the coming months and is closely monitoring the wider impact on operational KPIs.
As a result K3 Capital 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 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 the group’s monthly overheads are expected to reduce by approximately 70 per cent.
The company will also have the ability to extend these overhead savings beyond that period as required, subject to continued Government and management support.
All directors, managers and senior people together with some support staff will continue to work within the business to ensure each and every department will be fully functional.
Chief executive John Rigby said: “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.”