Welcome from The Chief Executive Officer
Kinovo plc is a leading UK provider of specialist property services centred on safety and regulatory compliance, home and community regeneration and sustainable living through the installation of efficient and greener energy alternatives.
We focus on three key strategic pillars, all of which ensure we are well placed to meet the long-term macro-economic drivers of our customers that are underpinned by Government legislation and policy.
Regulation:
Assuring safety and regulatory compliance standards in homes and places of work
Regeneration:
Creating and enhancing dwellings and workplaces to support sustainable and resilient communities
Renewables:
Providing energy efficient solutions that reduce carbon footprint
These areas build on our current focus and reflect our ambition to be a leading UK provider of end-to-end specialist services within the housing and property sector that support our customers to meet their own compliance and sustainability goals.
Our markets require vital, essential services that are generally consistent in their demand and non-discretionary in their nature. These specialist technical areas add value to our customer base, affording higher margins and higher barriers to entry; they are founded on long-term customer relationships that offer recurring revenues and good visibility of future earnings potential.
The Group has three long-established and complementary subsidiaries: Purdy, Spokemead, and R. Dunham. With a centralised framework of functions such as Finance, HR, IT, Bids and Sales and Marketing, we facilitate cohesion and collaboration between subsidiaries, providing them with the beneficial resources of a larger company, whilst ensuring the highest standards of governance and controls, assuring efficiencies and service consistency as well as providing economies of scale as we grow. In turn, this framework provides the subsidiaries with greater autonomy and operational focus to drive growth, deliver superior customer service levels and create value for all our stakeholders.
Whilst our current geographic focus is predominantly in London and the South-East, we have started to expand our reach in a controlled manner so that all our contracts are close enough to be managed effectively and efficiently, safeguarding our priority to deliver work to the highest quality standards and level of service.
Our objective to deliver consistent, sustainable and profitable growth will be primarily be driven organically. However, the strength of the underlying cash generative qualities of the business will facilitate complimenting this with targeted earnings-enhancing acquisitions that broaden and deepen our expertise in our three key strategic pillars, expand our geographic reach and offer an opportunity for consolidation within our fragmented markets. Successful integration will result in synergies through increased collaboration of subsidiaries, improved efficiency and cost-savings, whilst driving further revenue and market share growth.
Our customer base is dominated by relationships with Local Authorities and Housing Associations, servicing the social and affordable housing sector but also include public buildings and education, as well as the commercial and private sector. The very nature of our work ensconces us within the heart of sustainability in all its aspects; Environmental, Social and Governance.
We are proud to have the privilege of undertaking this significant responsibility and fully committed to creating value and making a positive difference whilst contributing to a better future for us all; our employees, our clients, our communities and our shareholders.
Welcome to Kinovo.
Board of Directors
The Board is responsible for establishing and maintaining the Group’s systems of internal financial controls and importance is placed on maintaining robust operational controls.
Sangita Shah
Non-Executive Chairman
Sangita Shah is the Non-Executive Chair of Kinovo plc. Sangita also serves as the the Non-Executive Chair of the AIM traded RA International Group plc, Non-Executive director for Inspired plc., Non-Executive Director of the NASDAQ listed Forward Industries Inc., and is a Director of the Quoted Companies Alliance.
Sangita has extensive experience in corporate finance, journalism and senior consultancy. Sangita brings with her a wealth of AIM listed and public market experience. She has held numerous senior roles within blue chip organisations, including Unilever, Mars, Ernst & Young and KPMG, was a former board director of Swindon Town FC and a past President of the Chartered Institute of Journalists. She has consulted to a number of organisations that include HM Cabinet Office, HSBC and other blue chip companies.
Sangita is also a regular consultant to a number of companies and to HM Cabinet Office. Sangita is a qualified accountant and a frequent keynote Chair and speaker in forums for the Windsor Leadership Trust and in the past the European Parliament and European School of Management.
David Bullen
Chief Executive Officer
David Bullen joined Kinovo plc in April 2019 from Boleyn International Ltd, a strategic management consultancy he founded in 2016. As a turnaround specialist, he brings an impressive track record of creating substantial shareholder value. David started his career at Novartis, holding several senior positions over nine years, both in the UK and abroad with a strong focus on turning around and transforming businesses within the organisation. David joined Anpario in 2007, moving on to become COO in 2009 and then CEO in 2011 until 2016. During his tenure as CEO, he oversaw growth in revenue and profits, delivering a four-fold increase in share price and the company being recognised with the Queen’s Enterprise Award.
Clive Lovett
Group Finance Director
Clive joined Kinovo plc as Group Finance Director in November 2018. He was previously at St. Ives plc from 2010 to 2018, the international digital transformation group now called Kin and Carta plc, where he was Group Finance Director for its St. Ives Marketing Activation (SIMA) division, comprising print and marketing services businesses. At SIMA, he was part of the leadership team that undertook the successful restructuring of the businesses prior to their sale in early 2018. Clive has held senior finance roles at Informa Ltd., part of Informa plc, and IBC Business Publishing. Clive qualified as a Chartered Accountant in 1989.
David Guest
Non-Executive Director
David was appointed to the Board as Non-Executive Director in December 2019, and brings significant audit and accountancy experience. Having qualified as an accountant over 28 years ago, David is a member of the Institute of Chartered Accountants in England and Wales and is currently the Senior Audit Partner at UHY Hacker Young in Brighton. He has extensive experience advising both UK and International companies on AIM, and is Chair of the Company’s Audit and Risk Committee.
Kim Wright
Non-Executive Director
Kim was appointed to the board in April 2022. She brings 30 years of public sector experience and has enjoyed a successful career in local government. She has worked with some of London’s biggest councils operating at senior level for nearly 25 years. Kim was appointed as Chief Executive of the London Borough of Brent in May 2023, having joined from the London Borough of Lewisham where she worked for just under four years in the same role. Prior to this she was Group Director of Neighborhoods and Housing at the London Borough of Hackney and has held other senior appointments with Barnet Council and Spelthorne Borough Council. Kim is a graduate of Loughborough University and a Fellow of the Institute of Leadership. Kim is the Chair of the Remuneration Committee.
Regulatory News
Corporate Governance
Updated: August 2024
The Board is fully committed to investing in the management systems and appropriate controls to ensure that the Group’s high standard of corporate governance is reflective of the quality of its operations and service.
The Directors recognise the importance of sound corporate governance commensurate with the size and nature of the Company and the interests of its shareholders.
The Quoted Companies Alliance has published a corporate governance code for small and mid-sized quoted companies, which includes a standard of minimum best practice for AIM companies, and recommendations for reporting corporate governance matters (the “QCA Code”). Kinovo Plc has formally adopted the QCA Code and our disclosures against each of the principles can be found in our QCA Code Corporate Governance Statement linked below.
Remuneration Committee
The Remuneration Committee is comprised of Kim Wright as Chair, Sangita Shah and David Guest. The Committee meets at least twice during the year to consider recommendations as to the composition and level of remuneration for Executive Directors including incentive scheme arrangements and proposals for share option awards. In addition, it considers the Group-wide pay policy, employee benefits offered and arrangements for any performance related pay scheme and share option schemes for employees in general. The Committee’s principal duties and responsibilities are set out in its Terms of Reference linked below.
Audit and Risk Committee
The Audit and Risk Committee is comprised of David Guest as Chair, Sangita Shah and Kim Wright and aims to meet at least three times per annum. Meetings are also attended by others, by invitation, including the auditor and the Group Finance Director, Clive Lovett. The Audit and Risk Committee has delegated responsibility for the oversight of the Company’s risk management, internal controls and procedures for determining the adequacy and efficiency of internal control and risk management systems. responsibilities are set out in its Terms of Reference linked below.
ESG Committee
The ESG Committee is comprised of Sangita Shah as Chair, Kim Wright and Lee Venables. The Committee meets at least twice during the year to consider ESG policies and practices and ensure they are designed to support strategy and promote long-term sustainable success. ESG performance is aligned to the Company’s purpose and values and is clearly linked to the successful delivery of the Company’s long-term strategy.
The Committee’s principal duties and responsibilities are set out in its Terms of Reference linked below.
Risk Analysis
Risk matrix
Effective risk management is critical to the achievement of our strategic objectives. Controls are integrated into all levels of our business. As a board we continually assess our exposure to risk and seek to ensure that risks are mitigated wherever possible.
Identified principal risks to the achievement of our strategic business objectives are outlined in the section below, together with their potential impact and the mitigation measures in place. The Board believe these risks to be the most significant with the potential to impact our strategy, our financial and operational performance and ultimately, our reputation. There may be other risks which are currently unknown to the group or which may become material in the future.
Our key risk categories are: strategic, financial and operational.
Strategic Risk and Description
WORK WINNING AND CONTRACT DELIVERY
Central to achieving our strategy is the work winning and successful delivery of our contract portfolio. Our strong financial position relies on our ability to successfully bid, mobilise, operate and manage such contracts. We see our increasingly broad service as a business differentiator to our clients coupled with ensuring consistent service delivery. Winning new and retaining existing contracts of this nature continues to be critical for the future success of our business.
Our bid, mobilisation and contract management processes operate under strict delegated authorises and are subject to rigorous executive management oversight and approval. These contracts are supported by teams of experienced bid, mobilisation and operational delivery specialists to mitigate the risk of failure at any stage. On-going contract assurance occurs together with regular dialogue to ensure service delivery is consistent with the customer expectations and contract KPI’s are adhered to. Through these activities we aim to develop long term customer relationships, supported by a strengthened framework to retain our existing customer base.
MARKET AND REGULATORY CONDITIONS
The UK market remains our only economic exposure. We anticipate a continued improvement in the pipeline of new opportunities and so our business model needs to adapt and grow with any on-going economic upturn. Our ability to recognise and respond to variations in the volume, value and range of services required may impact the Group’s ability to win or retain significant business opportunities. As a major employer, further development of the regulatory and legal framework in areas where we work may have a material financial and reputational impact on the business.
We continue to be focused on the delivery of sustainable, profitable growth during the year. We continue to strategically target growth areas with good margins, underpinned by a robust business infrastructure. Resilience is provided by our diverse offering and the level of mandatory and nondiscretionary work we undertake. We have continued to develop our group infrastructure to ensure identification of legal and regulatory requirements. Our operational teams remain primarily responsible for ensuring legal compliance, supported by the Group team which contains SHEQ and HR/legal specialists. Where required we obtain specialist technical advice to support our in-house team. We continue to proactively monitor the developing regulatory framework to plan and budget for ongoing compliance.
REPUTATIONAL MANAGEMENT
Maintaining a strong reputation is vital to our success as a business. A loss in market confidence in our ability to maintain current business or undertake new client opportunities may be caused by an adverse impact to our reputation which may, in turn significantly affect our financial performance and growth prospects. Significant impact to our reputation could be caused by an incident involving major harm to one of our people or clients/partners, corrupt practices involving fraud or bribery, inadequate financial control processes or failure to comply with regulatory requirements. Impact of this type would potentially result in financial penalties, losses of key contracts, an inability to win new business and challenges in retaining key staff and recruiting new staff.
Strong corporate governance and dedicated senior management remain the key elements of effective reputational management. Senior management provide a model of best practice and guidance to ensure our values and expected behaviours are clear and understood by everyone. As our business continues to grow and develop we will remain strongly focused on protecting the strength of our reputation through effective governance, leadership, and through cultivating open and transparent relationships with all stakeholders.
Financial Risks and Description
ACCESS TO FUNDING TO GROW THE BUSINESS AND CASH GENERATION
Our financial strength makes us an attractive partner to our customers and suppliers. Our ability to grow our business organically and by acquisition will be impacted if our financial performance deteriorates, by weakening profitability and therefore limiting our ability to access diverse sources of funding on competitive terms. This may cause and increase in the cost of borrowing or cash flow issues which could, in turn, further affect our financial performance. As a people business, our staff costs remain our most significant area of expenditure. Our ability to pay our people and suppliers regularly and at specific times relies not only on funding being available but also upon effective cash conversion.
We have developed and continue to enhance financial control procedures to oversee and monitor financial performance and cash conversion including daily monitoring of bank balances, weekly cash flow reporting and regular financial performance and balance sheet reviews, which include detailed working capital reviews and forecasts. We believe we have strong banking, debt finance and equity relationships and appropriate levels of gearing for our business.
RELIANCE ON MATERIAL COUNTERPARTIES
We depend on a number of significant counterparties such as insurers, banks, clients and suppliers to maintain our business activities. The failure of a key business partner, supplier, subcontractor, financer or other provider could materially affect the operational and financial effectiveness of our business and our ability to trade. Ensuring on-going relationships with our material counterparties will underpin the Group’s ability to meet its strategic objectives. We have developed a pool of suppliers and providers to ensure we are limited on the dependency of any one provider and hence the impact of any potential failure. The Board reviews and monitors material counterparty risk at divisional and business level and ensures that concentration levels are kept to a minimum.
Operational Risks and Description
SIGNIFICANT HEALTH, SAFETY OR ENVIRONMENTAL INCIDENT
Due to our diverse operational portfolio, the potential to cause significant harm to our employees, our business partners, members of the public, or to damage the environment will always exist. We are committed to safeguarding our people and protecting the environment wherever we operate. Failure to maintain our high standards could result in a significant incident arising.
The Board, through effective governance and management maintains it commitment to the highest standards of safety, health, environment and quality (SHEQ) performance. Our SHEQ director reports to the Board. Our performance is achieved through SHEQ management systems and employee engagement. Our well established management systems are certified to the ISO 9001 standard, we have recently enhanced our training programmes to ensure every employee has the core competencies required to do their work safely.
SYSTEM, PROCESS OR CONTROL FAILURE MAY IMPACT OUR OPERATIONAL PERFORMANCE
Robust business systems and processes underpin our operations. Such systems form the basis for our contract management and business support activities and we foresee increasing future reliance on such capability. These systems, in conjunction with our governance framework of policies and procedures, will help or drive innovation in customer requirements, improve our operational efficiency and provide the foundation of our administrative functions. As such they remain critical for the control and success of the business and the achievement of our strategic aims. Operational failure may result in a significant impact on operational delivery, contract management and client expectations due to the business critical nature of these systems. System failure could also result in a breakdown in the controls around high volume transactions. Financial or other misstatements, fines through statutory non-compliance issues and loss of client and/or regulator confidence could occur as a result.
The basis of our governance framework is provided by our core policies, which are subject to continual review and enhancement to manage our growing and diversifying business requirements in line with sound governance practice. Our internal control procedures continue to be reviewed formally and we are in the process of introducing interdependent operational and finance systems to achieve operational efficiencies and transparent reporting. IT related governance oversight is provided at an entity and group level and we continue to develop the IT infrastructure available to the Group to create a robust platform for operations central to the customer service delivery and supplier reporting process to be undertaken by operatives, the administrative teams and senior management
ATTRACTING AND RETAINING SKILLED PEOPLE
Attracting and retaining the best skilled people at all levels of the business is critical. This is particularly the case in ensuring we have access to a diverse range of views and experience and in attracting specific expertise at both managerial and operational levels where the market may be highly competitive. Failure to attract new talent, or to develop and retain our existing employees, could impact our ability to achieve our strategic growth objectives. As we continue to grow and diversify into new areas, this risk will continue to be a focus for the Board.
The growth we have already generated has naturally created a pipeline of opportunities for staff at every level of the business. This will continue to be the case as the Group develops. Additionally, to ensure a talent pool is identified, developed and ready for succession if needed, a succession plan exist for key management. Our focus on training and competency at all levels of the business from apprentices to senior management continues to ensure that we develop our people and enable them to successfully manage the changing profile of our business. Incentive programmes are also in place to ensure that key individuals are retained.
Reports and Presentations
AIM Rule 26
The information disclosed on this page is to specifically ensure compliance with Rule 26 of the AIM rules (last updated on 12 August 2024)
Kinovo Plc is a company incorporated and registered in England and Wales with registered number 09095860
The information disclosed on this page is to specifically ensure compliance with Rule 26 of the AIM rules (last updated on 12 August 2024)
Kinovo Plc is a company incorporated and registered in England and Wales with registered number 09095860
Business description
Kinovo Plc (the Company) was formed in 2015 as a holding company to provide a platform for strategic acquisitions in the mechanical, electrical and general building services industries. Kinovo currently owns 100% of Purdy Contracts Ltd (Purdy), R. Dunham (UK) Ltd (Dunhams) and Spokemead Maintenance Ltd (Spokemead).
Kinovo acquired Purdy in July 2015. Purdy was established in 1984 as a building and property services contractor, and is now resourced with specialist teams in heating, electrical services, property services and microgeneration systems.
Kinovo acquired Spokemead in April 2016. Spokemead was established in 1974 and has a highly skilled and highly motivated workforce of fully qualified electricians, specialising in electrical installation and maintenance of local authority owned housing stock.
In November 2018, Kinovo acquired Dunhams which carries out electrical services and maintenance and building services work for local government organisations and the private sector.
The Group are focused on three strategic workflow pillars: Regulation, Regeneration and Renewables. These pillars are centred on compliance-driven, regulatory-led specialist services that offer long-term contracts, recurring revenue streams and strong cash generation. These three pillars are entirely complimentary and are supported by long-term market drivers, namely compliance and decarbonisation.
The Group predominately provides services to local authorities and housing associations across London and South East England. In December 2023 the Company opened an office in Norfolk after identifying the location as a natural opportunity to drive organic geographical expansion. The experienced management teams place emphasis on the provision of a high level of service through which they have developed long-standing relationships with customers. The Group is consolidating its position in the key markets of London and South East and expanding into East England.
The Directors anticipate that continuing to pursue a strategy of organic growth will be the best way to drive shareholder value. The primary objective of the Company at present is to demonstrate the cash generative qualities of the business by building cash reserves. The Company will continually evaluate the market and may consider acquisitions in the future which are the right strategic fit for the Group.
The Group continues to invest internally, including building business development, procurement and service support teams, as well as strengthening sales and marketing collateral. This is underpinned by rigorous and robust cost management. Additionally, the Directors ensure that we continuously develop our offering as a one stop shop to enable us to improve the quality of our proposals for new projects, as well as enhancing our offering for existing clients.
The Directors anticipate that continued growth will be underpinned by expanding opportunities in a growing market. Our services are benefiting from strong market fundamentals driven by government standards and legislation, such as the Social Housing (Regulation) Act, the Building Safety Act, the Fire Safety Act and Electrical Wiring legislation as well as the drive to Net Zero, supported by initiatives such as the Social Housing Decarbonisation Fund. These have meaningfully increased demand for, and frequency of, our range of works across our operating areas and the three strategic pillars. Such government policies and initiatives place compulsory obligations on landlords leading to potential legal liability requiring local authority and housing associations to meet a minimum standard in all social housing. These obligations fall on housing bodies regardless of budgetary pressures and demands they face in other areas.
Expenditure on existing housing stock continued to increase last year and is at record levels, according to the latest quarterly survey from the RSH (January to March 2024). A record £7.9 billion was spent in the 12 months to 31 March 2024 – a 15% increase on previous year – a further £9.1 billion is forecast over the next year.
The Directors remain focused on driving shareholder value, and will continue to focus on the three key strategic pillars of Regulation, Regeneration and Renewables.
Directors
Takeovers and mergers
The Company is subject to the UK City Code on Takeovers and Mergers.
Articles of Association
Company contact information
Brooklyn Lodge, Mott Street, High Beech, Waltham Abbey, London, E4 7RW
T:+44 01992 703431
Exchange/trading platform
The securities of Kinovo Plc are traded on the AIM market operated by the London Stock Exchange plc. Its shares have not been admitted, nor have any applications been made, for any of its shares to be admitted or traded on any other exchanges or trading platform
Company documentation
Significant shareholders and shares in issue
Share restrictions
Advisors and registrars
Nominated Adviser, Financial Adviser & Sole Broker to the Company
Canaccord Genuity Limited, 88 Wood Street, London, EC2V 7QR
Solicitors to the Company
Dorsey & Whitney (Europe) LLP,199 Bishopsgate, London, EC2M 3UT
Auditor to the Company
Moore Kingston Smith LLP, 9 Appold Street, London, EC2A 2AP
Financial PR
Hudson Sandler Ltd, 25 Charterhouse Square, London, EC1M 6AE
Registrar
Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, B62 8HD
Company Secretary
ONE Advisory Limited
201 Temple Chambers, 3-7 Temple Avenue, London, United Kingdom, EC4Y 0DT