REG - Kinovo PLC - Update on DCB Discontinued Operations

KinovoAnnouncement

08/03/2024 07:00

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RNS Number : 0790G  Kinovo PLC  08 March 2024

8 March 2024

 

Kinovo plc

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

 

Update on DCB Discontinued Operations

 

Kinovo plc (AIM:KINO), the specialist property services Group that delivers
compliance and sustainability solutions, provides the following update on its
discontinued operations.

 

The Group continues to make positive progress towards concluding the remaining
projects relating to DCB Kent ("DCB"), its former construction division, with
a further four sites having their build completed subject to only final minor
snagging checks. This means that a total of seven of the nine projects will
soon have been concluded and before the end of Kinovo's financial year.

 

As announced in our previous update on 9 February 2024, the penultimate
project is expected to be build complete by the end of May 2024 and
discussions continue regarding the final project (due to complete in 2026).
The timeline on the penultimate project is subject only to a recent
instruction from the client to supply and fit the connection of a statutory
incoming gas main, but the instruction will not impact financial obligations.

 

These nine projects have been affected by a number of unforeseen and legacy
issues, arising from poor quality workmanship with most only becoming apparent
on final commissioning and surveys at the sites as they approached completion.
These issues caused damage that required significant remedial action with
additional costs, causing associated project delays which were, in certain
instances, exacerbated by one of the wettest winters on record. The Board
continues to assess the recovery of costs incurred as a result of works that
have not been performed to a reasonable standard and intends to pursue these
rigorously.

 

Consequently, with most of the outstanding projects now completed, the Board
has assessed that the pre-tax net cost to complete all the DCB projects has
now risen by a total of £2.9 million from the £5.72 million highlighted at
the Interim Results issued 28 November 2023. This includes a bond with a value
of £0.9 million, on which Kinovo has now received a formal demand, in
relation to the final project.

 

A significant majority of these net costs have already been paid, with the
remainder expected to be funded from the strong cash generation from the
underlying operations and existing finance facilities to manage the cashflow
dynamics. In accordance, the Company maintains the support of its banking
partner, HSBC UK Bank plc.

 

The Company looks forward to bringing these DCB legacy issues to a conclusion
whilst the continuing business performs well, demonstrating robustness,
resilience and growth. The continuing business is performing strongly during
the peak trading season and the Board continues to anticipate the outlook for
the full year ending March 2024 to be at least in line with that provided on
the 9 February.

 

The Company will be providing a live presentation via the Investors Meet
Company platform on Tuesday 12(th) March at 10:00 BST.

 

The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via the Investor Meet Company dashboard up until
9am the day before the meeting or at any time during the live presentation.

 

Investors can sign up to Investor Meet Company for free and add to meet Kinovo
plc via:

https://www.investormeetcompany.com/kinovo-plc/register-investor
(https://www.investormeetcompany.com/kinovo-plc/register-investor)

 

Investors who already follow Kinovo plc on the Investor Meet Company platform
will automatically be invited.

 

 

 

This announcement contains inside information for the purposes of article 7 of
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
domain.

 

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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