UPDATE OF THE IMPACT OF THE CORONAVIRUS

UPDATE ON THE IMPACT OF THE CORONAVIRUS

The unexpected and unprecedented impact that the Coronavirus is having on global markets and companies is well known. The safety of our Portfolio Company staff and customers is the top priority and we are fully supportive of the various government initiatives to curb the impact and spread of the Coronavirus. All of the Ethos Capital Portfolio Companies have implemented various measures to protect the health and safety of staff and customers and have business continuity plans in place to deal with the impacts of Coronavirus.

As reported in the 31 December 2019 interim results most of Ethos Capital’s Portfolio Companies delivered a robust performance despite the continued challenging macroenvironment and continue to optimise their business models and key operational metrics.

The extent and severity of Coronavirus are still uncertain however, the virus and various government interventions to prevent its spread, will have a short-term impact on the underlying businesses’ profitability. The Portfolio Companies have all proactively implemented plans where possible to mitigate the impacts of the Coronavirus with a focus on reducing costs, preserving cash and maximizing liquidity to manage their businesses through this period.

The outbreak of the Coronavirus has resulted in sharp declines in peer group multiples which will have an impact on Portfolio Company carrying values. While the impact of Coronavirus is likely to disrupt earnings and free cash flow for a period of time, the Board does not expect it to have any material impact on the Portfolio Companies’ maintainable earnings and their long-term fundamental valuations once the crisis has passed.

Ethos Capital remains confident that the actions taken by its Portfolio Companies are appropriate and timely. The situation continues to evolve daily and the outcome remains uncertain. We will provide further updates to shareholders as appropriate.