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
12th 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
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
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Sangita Shah, Chairman
David Bullen, Chief Executive
Officer
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+44 (0)20 7796 4133
(via Hudson Sandler)
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Canaccord Genuity Limited (Nominated Adviser and Sole Broker)
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+44 (0)20 7523 8000
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Adam James
Andrew Potts
Harry Rees
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Hudson Sandler (Financial
PR)
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+44 (0)20 7796 4133
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Dan de Belder
Harry Griffiths
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