REG - Kinovo PLC - Trading Update & Notice of Results

KinovoAnnouncement

07/11/2024 07:00

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RNS Number : 2604L  Kinovo PLC  07 November 2024

7 November 2024

("Kinovo", the "Group" or the "Company")

 

Trading Update & Notice of Results

Strong growth in profitability continues in H1

 

Kinovo plc (AIM: KINO), the specialist property services Group that delivers
compliance and sustainability solutions, is pleased to provide a trading
update for the six months ending 30 September 2024 (the "Period"). All figures
are unaudited. The Group's trading for the full year remains in line with the
Board's expectations.

 

The Company will announce its Interim Results for the Period on 26 November
2024.

 

Continuing Operations

 

During the Period, the Group delivered improved margins, despite continued
initiation and mobilisation delays from contracts including the recently
announced contract wins in Hackney. This demonstrated the Group's underlying
operational and commercial strength where the compliance and remedial
workstreams dominated.

 

The Group expects to report revenue of £29.6 million, a decrease of 3%
compared to the previous period (H1 FY24: £30.3 million), with gross profit
increasing 8% to £9.1 million (H1 FY24: £8.4 million) and gross margins
increasing to 30.7%, an increase of 3% from the 27.7% in H1 FY24.  EBITDA is
expected to grow by 10% to £3.2 million (H1 FY24: £2.9 million), with EBITDA
margins increasing to 10.8% (H1 FY24: 9.6%).

 

The pipeline of new work has continued to be bolstered with both framework
wins and direct awards during the period,  including:

 

·    The Eastern Procurement Heating Installation, Servicing and
Maintenance Framework for Domestic and Commercial Heating with an indicative
maximum aggregate contract value of £75 million over a four-year term across
Kinovo and six other contractors

·   The Eastern Procurement Compliance Framework under Lot 1 for door
entry, security and emergency lighting for a four year call-off contract worth
£5 million in aggregate across Kinovo and one other contractor

·    A direct award for Richmond Housing Partnership for build,
electrical and disrepair work for two years, worth £800,000 per annum

·    A direct award through Eastlight Community Homes for a project
relating to voids worth approximately £200,000 over seven months

·     A direct award from A2 Dominion Housing for voids, damp and mould
and reactive repairs worth up to £1 million over a two year period with the
potential for two further one-year extensions

·     A tender win for the London Borough of Newham for electrical testing
and remedial works worth £80,000 over one year with the potential to extend
for a further nine years

 

Discontinued Operations

 

As previously announced, the Company agreed the financial settlement of the
final outstanding legacy project relating to its former construction division,
DCB (Kent) Ltd ("DCB"), amounting to £2.2 million payable over 18 months. The
first three monthly instalments amounting to £860,000 have been paid which
triggered the release of the related performance bond of the same amount.

 

Also previously announced, the Company has been contracted to complete
additional external works on the last project. These additional works remains
ongoing and the Company will confirm in due course once practical completion
has been achieved. The overall costs to complete for all the nine projects
have remained as previously announced and the DCB legacy is effectively
complete, leaving the Company to now focus solely on the continuing business,
normalising cashflow and crystallising potential recoveries relating to the
DCB projects. To that end, the Company is pleased to announce that it has
recently been notified of success with its first two legal claims for
recoveries with the sums awarded of approximately £360,000.

 

David Bullen, Chief Executive Officer of Kinovo, commented:

"I am pleased to report on a robust first-half trading performance, with
strong bottom-line growth and a resilient topline performance when considering
the deferrals to some of our planned works.

 

Despite the proposed increases to Employer's National Insurance, I am
encouraged by elements of last week's Autumn Budget, particularly the £3.4
billion over the next three years for the Warm Homes Plan, the additional £1
billion contribution to building safety remediation in social housing, the new
five year social housing rent settlement and the additional top up of £500
million for the Affordable Homes Programme, which will undoubtedly provide a
meaningful boost to the sector.

 

We continue to be well positioned from regulatory and legislative drivers and
look forward to benefiting from this government funding to further drive our
organic growth. The previously deferred planned works are now also coming
onstream and our pipeline of new works remains strong. Consequently, and
whilst revenue outturn will partially depend on resultant mix of works, the
Group's trading for the full year nevertheless remains in line with the
Board's expectations."

 

 

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

 Will Reynish

 

 

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