The Kinovo Plc Annual Report 2023 has been published and can be viewed here:

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The Company will hold its Annual General Meeting on 30 August 2023 at 12:00 p.m. at the offices of Hudson Sandler, 25 Charterhouse Square, London, EC1M 6AE.

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The Form of Proxy can also be viewed here:

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Shareholders who have elected to receive e-communications from the Company will receive a letter or an email notifying them as to the availability of the Annual Report, Notice of Annual General Meeting and Form of Proxy on the Company’s website. Shareholders who have elected to receive hard copies of the relevant documents will receive a copy of the Annual Report, Notice of Annual General Meeting and a Form of Proxy by post.

Financial highlights (continuing operations)

  • Revenue increased by 18% to £62.7 million (FY22: £53.3 million)
  • Adjusted EBITDA increased by 29% to £5.5 million (FY22: £4.2 million)
  • Profit before tax up by 58% to £4.4 million (FY22: £2.8 million)
  • Basic earnings per share increased 63% to 5.97p (FY22: 3.66p)
  • Continued strong adjusted cash conversion of 107% during the period (FY22: 223%)
  • Net cash of £1.1 million (net debt of £0.3 million in FY22)
  • Repaid £2.5 million of HSBC Term Loan in full in FY23, ahead of schedule
  • Three year visible revenues of £146.4million (FY22: £140.4 million)

Operating highlights

  • The business continues to benefit from legislative drivers and a streamlined focus on three key areas: Regulation, Regeneration and Renewables
    • Regulation contributed 56% of total revenues (FY22: 59%), Regeneration 28% (FY22: 20%) and Renewables 16% (FY22: 21%)
  • Operational efficiencies continue to mitigate inflationary pressures:
    • Gross margins increased 2.4% from 23.9% to 26.3%
    • EBITDA margins have strengthened by 0.8% from 7.9% to 8.7%
  • Strong visibility of future revenues demonstrates the business’ quality of earnings:
    • 98% of the three year visible revenues are recurring
    • £64 million of the three year visible revenues are anticipated to be recognised in FY24
    • 71% of all term contracts have price-index linked clauses
  • Greater number of contract wins with longer average lengths, including:
    • 5 year contract with The Hyde Group at an aggregate value of £25 million for electrical testing and associated works, with a potential value of £40 million over 8 years
    • £4 million contract over 2 years with the London Borough of Waltham Forest for electrical, commercial mechanical and associated builders works
  • High-ranking placings on key frameworks, including several top place rankings, significantly increasing future revenue generation potential:
    • Three awards under the National Housing Maintenance Framework, at an estimated national value across the relevant contractors in aggregate of £200 million over 4 years
    • First position on the Hyde Framework Agreement for domestic and communal electrical testing
    • The Greener Future Partnership’s Decarbonisation Framework with an estimated national value across the relevant contractors of £81 million until the end of 2025
  • Continued delivery of ESG commitments:
    • Total energy consumed reduced by 23% and total carbon emissions by 22%
  • Accreditations enhanced during the period to complement the scope of our offering, adopting a fabric first approach by gaining additional Trustmark PAS2030 certifications
  • Significant headway has been achieved towards completion of the legacy DCB Kent construction projects (discontinued operations), with seven of the nine projects having reached agreements on contract terms and expected to be completed by the end of the current financial year and constructive dialogue ongoing to agree contracts regarding the other two. The estimated net costs to complete the projects continues to be £4.3 million. A £5.3 million loss is reported in the year ended 31 March 2023 with £1.0 million of anticipated recoveries recognised in future periods when they have been realised

Outlook:

  • The Company continues to benefit from its clear and defined strategy as well as legislative drivers, positioning the business well to achieve further growth
    • Robust pipeline of further opportunities from both direct contract wins and awards under framework agreements
  • The Board is confident of delivering strong performance going forwards, and is exploring partnership and other strategic opportunities to accelerate Kinovo’s growth objective

David Bullen, Chief Executive Officer of Kinovo, commented:

“I am delighted to report a strong set of results in what has been a critical year of transition for Kinovo. We continue to reap the rewards of our strategic repositioning, focusing on three key areas of specialism: Regulation, Regeneration and Renewables. This, as well as key investments made within the business, mean we are submitting for and winning higher value contracts over longer average durations. As a result, our three-year visible revenues have increased to over £146 million.

We have also made significant progress with our contractual obligations relating to our former construction division, DCB Kent. We expect seven of the nine projects to be completed within FY24 and remain in constructive dialogue to agree contracts regarding the final two.

Looking ahead, we are confident that our strategy, business and underlying market drivers position the business well to achieve further growth on an organic basis. We also continue to assess the market for value accretive opportunities for the Group.”

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