REG - Kinovo PLC - Trading Update

KinovoAnnouncement

17/05/2023 07:00

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RNS Number : 6353Z  Kinovo PLC  17 May 2023

17 May 2023

Kinovo plc

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

 

Trading Update

 

Strategic repositioning underpinning strong performance

Results marginally above expectations

 

Kinovo Plc (AIM: KINO), the specialist property services Group that delivers
compliance and sustainability solutions, is pleased to provide a trading
update for the year ending 31 March 2023.

 

Kinovo continues to benefit from its strategic repositioning under its three
key pillars of Regulation, Regeneration and Renewables aligned with continued
investment in the business and a sustained focus on people though recruitment,
retention and personal and professional development.

 

The Group expects, subject to audit, to report a financial performance
marginally above expectations for the full year, having successfully navigated
the significant combined challenges of inflationary pressures, material
shortages and labour shortages during the year.  Revenues for continuing
operations increased by 18% to £62.7 million (2022: £53.3 million), with
EBITDA (adjusted to include lease payments), rising by 29% to £5.5 million
(2022: £4.2 million).

 

In March 2023, the Company accelerated the repayment of its outstanding term
loan of £766,000, well in advance of the two final quarterly payment dates of
May 2023 and August 2023.

 

At 31 March 2023, the Group had a cash balance of £1.3 million and a net cash
position of £1.1 million compared to a net debt position of £339,000 as at
31 March 2022.

 

Progress during the period has been underpinned by a key strategic objective
to accelerate organic growth through our three key pillars, driven by an
increase in underlying volumes and new workstreams, price renegotiations as
well as winning new and extending existing contracts.

 

In turn, the continued strengthening recognition and reputation of the Group
has contributed to an ongoing diversification of our client base through the
success of our contract wins, whilst further consolidating our geographic
position, with over 20% of our total number of clients being newly introduced
to the Group over the last couple of years.

 

The foundation of our Regulation pillar has enabled the Group to benefit from
the ever-increasing legislative tailwinds, including the Building Safety Act,
Fire Safety Act and changes to the Electrical Wiring Legislation, all of which
raise the bar for compliance and materially increase the demand for work under
the Regulation pillar as well as additional remedial and planned works under
the Regeneration pillar provided by Kinovo and its subsidiaries.

 

With sustainability an ever-increasing priority, during the year the Group's
Renewables pillar further strengthened its qualifying criteria for the
Trustmark PAS2030 installer accreditations.  This has encompassed additional
certification elements to facilitate a "fabric first" prioritised approach to
energy efficiency, which takes the ever-ageing social housing stock into
consideration.

 

As previously announced, Kinovo was recently awarded the highest-ranking
positions with the National Housing Maintenance Forum Framework for several
lots across various geographies within London and the South-East, including
"Net Zero Carbon Works" and interest is already building.  Furthermore, at
the end of March 2023, the Government announced the latest awards for the
Social Housing Decarbonisation Fund for 2023-2025, totalling £778 million,
which will be match-funded by recipients.  This includes a total of £143
million awarded to direct clients of Kinovo and its subsidiaries, which offers
further potential for the year ahead.

 

Under parent company obligations following the sale of its former non-core
construction division DCB Kent Limited, Kinovo is now contracted on seven of
the nine outstanding projects, with positive discussions ongoing on the other
two. Two of the three performance bonds for the projects have also been
resolved and total project costs remain in line with expectations.

 

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

"We are delighted to report another strong year for Kinovo as the business
continues to deliver good progress against its strategic goals.  Despite the
challenging economic backdrop, we have achieved significant growth this year,
with revenue and adjusted EBITDA marginally above expectations.

 

Momentum continues in the new financial year and with further opportunities to
capitalise on our three key pillars of Regulation, Regeneration and
Renewables, we are confident of delivering another strong performance, driving
further growth."

 

 

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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