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."

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