REG - Kinovo PLC - Trading Update

KinovoAnnouncement

24/05/2024 07:00

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RNS Number : 7289P  Kinovo PLC  24 May 2024

24 May 2024

Kinovo plc

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

 

Trading Update

Strong performance driven by growth strategy; Full Year Results anticipated to
be ahead of prior 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 2024, further to the trading update on 2
May 2024.

 

Continuing Operations

 

Kinovo continues to benefit from its strategic repositioning and the
implementation of its resulting growth strategy, with a key focus on
capitalising on regulatory drivers within compliance and decarbonisation under
its three key pillars of Regulation, Regeneration and Renewables works.

 

As reported on 2 May 2024, subject to audit, the Group expects to report a
full year performance ahead of prior expectations. Profit continued to grow
during the year, with a diversity in our mix of works along with the
robustness of our operational and cost efficiencies enabling gross profits for
continuing operations to increase by 15% to £18.9 million (FY23: £16.5
million) underpinned by gross margins strengthening to 29.4% (FY23: 26.3%).
EBITDA (adjusted to include lease payments) rose by 23% to £6.7 million
(FY23: £5.5 million), ahead of prior expectations of £6.2 million. Adjusted
profit before tax grew by 25% to £6.1 million (FY23: £4.9 million). At 31
March 2024, the Group held a cash balance of £0.5 million and had a net cash
position of £0.4 million (FY23: £1.1 million).

 

Revenue grew to £64.1 million (FY23: £62.7 million), with this moderate
increase reflecting a different revenue mix of projects contracted in the year
and including the strategic exit from a private sector mechanical contract
amounting to £3.6 million in revenue due to logistical and administrative
complexities.  As previously announced, certain planned workstreams in FY24
had experienced some client related administrative delays but these works are
now underway.

 

Strong progress during the period has been underpinned by the ongoing
implementation of our key strategic objectives to accelerate organic growth
through our three key pillars as well as investing in our people, leveraging
efficiencies through collaborative support functions, and consolidating our
geographic position.

 

During the year, the Group announced numerous direct awards, framework wins
and contract extensions across all service divisions, positively increasing
our outlook on revenues, with our three-year visible revenues increasing by
11% to £162.2 million (FY23: £146.4 million), and further diversifying our
client portfolio with a net increase in our overall client base of 11%.

 

During the second half of the financial year, the Company established an
office in Norfolk which was identified as an organic growth opportunity. This
is already delivering, with Kinovo having won several new clients and is
generating a number of meaningful opportunities to demonstrate the quality of
our works through initial short-term awards, which are in the process of being
converted into longer term contract wins. The Company's recognition and
reputation is gaining traction in the area, and this positive trajectory
provides a firm foundation to capitalise on the potential within the region.

 

The Company also set up a Retrofit team, a key part of our Renewables pillar,
which will leverage works relating to the Government's "net zero" objectives
within local authorities and councils under limited timeframes. The Retrofit
team is already generating a return on investment, being fully focused on both
supporting the implementation of ongoing projects in hand and generating new
business development opportunities. Decarbonisation is, and will be, a growing
theme in the sector alongside the ever-increasing regulatory and compliance
environment.

 

The Group's continued investment in our people, our breadth of accreditations
and our one-stop-shop offering positions us well to partner and support our
clients, delivering operational excellence and a best-in-class service.

 

Discontinued Operations

 

The Company reiterates its position, as outlined in the RNS on 2 May 2024, in
relation to DCB Kent ("DCB"), Kinovo's former construction subsidiary. A total
of seven of the nine projects have either achieved practical completion or
have been concluded with the penultimate site due to conclude by early July
2024 and the Company remains in discussions regarding the final project which
is currently due to be completed in 2026. The anticipated financial
liabilities for DCB currently remain in line with those disclosed on 8 March
2024.

 

Notice of Results

 

The Company will announce its results for the year ending 31 March 2024 on
Tuesday 9 July 2024. An analyst presentation will be held at the offices of
Hudson Sandler that morning, and details regarding an investor presentation
will be provided in due course.

 

 

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

"Following our recent announcement that we have produced a full year
performance ahead of expectations, I am delighted to provide more colour on
what has been a critical year of strategic progress for Kinovo.

 

Our strategic repositioning to focus on the three pillars of Regulation,
Regeneration and Renewables works continues to yield results, and the
investments we have made across the business, in our people and our
capabilities, are generating strong returns.

 

Underpinned by key regulatory and legislative drivers, we remain confident in
our growth trajectory as we continue to deliver significant growth. We look
forward to providing a further update at our results in July."

 

 

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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