REG - Kinovo PLC - AGM Trading Update

KinovoAnnouncement

15/09/2022 07:01

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RNS Number : 4978Z  Kinovo PLC  15 September 2022

15 September 2022

Kinovo plc

("Kinovo" or the "Company")

 

AGM Trading Update

 

Kinovo Plc (AIM: KINO), the specialist property services Group that delivers
compliance and sustainability solutions, provides a trading update ahead of
the Company's Annual General Meeting ("AGM") being held at 10am today.

 

Current Trading

 

Kinovo has continued the strong momentum it achieved during the last financial
year and the first quarter, despite a difficult trading environment resulting
from the impacts of significant inflation, supply chain constraints and labour
availability. Kinovo has been able to partially offset these challenges
through positive contract discussions regarding pricing, effective supply
chain management and maximising its available labour pool. Based on management
accounts the directors expect to report for the first six months ending 30
September 2022, revenues of approximately £30.0 million (H1 2022: £23.8
million) and Adjusted EBITDA in the region of £2.3 million (H1 2022: £1.8
million). The directors expect this positive momentum in financial performance
to continue into the second half of the financial year.

 

Throughout the pandemic the industry experienced a fall in demand as both
clients and residents limited access to properties. However, due to the
regulatory driven, non-discretionary nature of our work, the current financial
period has seen a significant rebound in activity as the backlog of essential
work has started to be addressed. Additionally, the heightened increase in
regulation and compliance, for example through the Building Safety Act which
was granted Royal Assent on 28 April 2022, has also resulted in greater demand
for our services.

 

During the period, the Company renewed contracts for the London Borough of
Bexley and Estuary Housing worth a total of £7.0 million over a four-year
period, new clients were gained including the Royal Borough of Greenwich and
Orbit Housing worth in aggregate £2.6 million per annum and a £1.0 million
contract for an emergency lighting program, to be completed within the current
calendar year, was awarded by the London Borough of Southwark. In addition, we
have a number of selective new business proposals that have already been
submitted and are awaiting decisions, which the Company will announce, when
appropriate.

 

Discussions continue with clients on the DCB construction projects and Kinovo
hopes that on site activity will recommence in the near future, enabling
Kinovo to progress its commitments under the parent company guarantees. Costs
to complete the projects are expected to be in the region £4.0 million plus
expenses, as previously announced.

 

Our banking partner, HSBC UK Bank plc, continue their positive support of the
Group and we are in the process of completing documentation for the
refinancing of the £1.5 million term loan that was due for repayment on 30
September 2022 and the renewal of the current £2.5 million overdraft
facility.

 

With the current macro-economic challenges offering no immediate sign of
abating, coupled with the continued catch up from the pandemic, the pressures
for local councils and authorities within the social housing sector remains
ever increasing.  The Company and our range of services are well positioned
to support the authorities in addressing these challenges together.

 

David Bullen, Chief Executive Officer of Kinovo plc, commented:

"I am delighted to issue this trading update and report on the considerable
progress made so far during FY23. I am proud of the underlying business'
performance and how this has continued amid a number of very challenging
conditions.

 

It is rewarding to observe the benefits of our strategic repositioning.  All
of our staff deserve recognition for embracing and implementing the strategy
with commitment and vigour, enabling us to deliver such strong progress. The
Company is well-positioned for growth and I look forward to further updating
the market on our progress."

 

 

Enquiries

 

 Kinovo plc
 Sangita Shah, Chairman                                          +44 (0)20 7796 4133

 David Bullen, Chief Executive Officer                           (via Hudson Sandler)

 Canaccord Genuity Limited (Nominated Adviser and Sole Broker)   +44 (0)20 7523 8000
 Adam James

 Andrew Potts

 Harry Rees

 Hudson Sandler (Financial PR)                                   +44 (0)20 7796 4133
 Dan de Belder

 Harry Griffiths

 

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the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
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